Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________

FORM 10-Q

(Mark one)

☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: June 29, 2024

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 000-03905

TRANSCAT, INC.

(Exact name of registrant as specified in its charter)

Ohio	16-0874418
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

35 Vantage Point Drive, Rochester, New York 14624

(Address of principal executive offices) (Zip Code)

(585) 352-7777

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	TRNS	Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes No ☑

The number of shares of common stock, par value $0.50 per share, of the registrant outstanding as of July 31, 2024 was 9,145,144.

Table of Contents

		Page(s)
PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:

	Statements of Income for the First Quarter Ended June 29, 2024 and June 24, 2023	1

	Statements of Comprehensive Income for the First Quarter Ended June 29, 2024 and June 24, 2023	2

	Balance Sheets as of June 29, 2024 and March 30, 2024	3

	Statements of Cash Flows for the First Quarter Ended June 29, 2024 and June 24, 2023	4

	Statements of Changes in Shareholders' Equity for the First Quarter Ended June 29, 2024 and June 24, 2023	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27

Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION

Item 6.	Exhibits	29

SIGNATURES		31

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

	(Unaudited)
	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*

Service Revenue	$	43,778		$	39,853
Distribution Sales		22,929			20,745
Total Revenue		66,707			60,598

Cost of Service Revenue		28,895			26,882
Cost of Distribution Sales		15,157			15,006
Total Cost of Revenue		44,052			41,888

Gross Profit		22,655			18,710

Selling, Marketing and Warehouse Expenses		7,801			6,469
General and Administrative Expenses		9,755			7,601
Total Operating Expenses		17,556			14,070

Operating Income		5,099			4,640

Interest Expense		52			814
Interest Income		(312	)		-
Other Expense		131			64
Total Interest and Other, net		(129	)		878

Income Before Provision For Income Taxes		5,228			3,762
Provision for Income Taxes		820			813

Net Income	$	4,408		$	2,949

Basic Earnings Per Share	$	0.49		$	0.39
Average Shares Outstanding		9,064			7,622

Diluted Earnings Per Share	$	0.48		$	0.38
Average Shares Outstanding		9,196			7,762

See accompanying notes to consolidated financial statements.

Table of Contents

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

	(Unaudited)
	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*
Net Income	$	4,408		$	2,949

Other Comprehensive (Loss) / Income :
Currency Translation Adjustment		(161	)		476
Other, net of tax effects of $2 and $2 for the first quarter ended June 29, 2024 and June 24, 2023, respectively		6			6
Total Other Comprehensive (Loss) / Income		(155	)		482

Comprehensive Income	$	4,253		$	3,431

See accompanying notes to consolidated financial statements.

Table of Contents

TRANSCAT, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

	(Unaudited)			(Audited)
	*June 29,*			*March 30,*
	*2024*			*2024*
ASSETS
Current Assets:
Cash and Cash Equivalents	$	22,657		$	19,646
Marketable Securities		-		$	15,533
Accounts Receivable, less allowance for credit losses of $492 and $544 as of June 29, 2024 and March 30, 2024, respectively		48,156			47,779
Other Receivables		242			506
Inventory, net		18,128			17,418
Prepaid Expenses and Other Current Assets		5,070			4,276
Total Current Assets		94,253			105,158
Property and Equipment, net		45,954			38,944
Goodwill		138,146			105,585
Intangible Assets, net		26,254			19,987
Right to Use Assets, net		17,996			16,823
Other Assets		1,049			1,055
Total Assets	$	323,652		$	287,552

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	13,076		$	11,495
Accrued Compensation and Other Current Liabilities		12,677			16,739
Income Taxes Payable		3,687			2,926
Current Portion of Long-Term Debt		2,362			2,339
Total Current Liabilities		31,802			33,499
Long-Term Debt		1,218			1,817
Deferred Tax Liabilities, net		9,287			9,291
Lease Liabilities		15,400			14,873
Other Liabilities		3,657			2,903
Total Liabilities		61,364			62,383

Shareholders' Equity:
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 9,144,731 and 8,839,299 shares issued and outstanding as of June 29, 2024 and March 30, 2024, respectively		4,572			4,420
Capital in Excess of Par Value		175,299			141,624
Accumulated Other Comprehensive Loss		(1,104	)		(949	)
Retained Earnings		83,521			80,074
Total Shareholders' Equity		262,288			225,169
Total Liabilities and Shareholders' Equity	$	323,652		$	287,552

See accompanying notes to consolidated financial statements.

Table of Contents

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	(Unaudited)
	*Three Months Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*
Cash Flows from Operating Activities:
Net Income	$	4,408		$	2,949
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Net (Gain)/Loss on Disposal of Property and Equipment		(4	)		8
Deferred Income Taxes		(4	)		44
Depreciation and Amortization		4,113			2,790
(Recovery of)/Provision for Accounts Receivable and Inventory Reserves		(89	)		138
Stock-Based Compensation Expense		697			930
Changes in Assets and Liabilities, net of acquisitions:
Accounts Receivable and Other Receivables		2,814			3,115
Inventory		(235	)		1,950
Prepaid Expenses and Other Current Assets		(687	)		531
Accounts Payable		1,425			(4,315	)
Accrued Compensation and Other Current Liabilities		(4,273	)		(1,203	)
Income Taxes Payable		759			599
Net Cash Provided by Operating Activities		8,924			7,536

Cash Flows from Investing Activities:
Purchase of Property and Equipment		(3,674	)		(2,767	)
Business Acquisitions, net of cash acquired		(15,953	)		(2,869	)
Sales of Marketable Securities		15,533			-
Net Cash Used in Investing Activities		(4,094	)		(5,636	)

Cash Flows from Financing Activities:
Repayment of Revolving Credit Facility, net		-			(204	)
Repayments of Term Loan		(576	)		(553	)
Issuance of Common Stock, net of direct costs		260			199
Repurchase of Common Stock		(1,619	)		(301	)
Net Cash Used in Financing Activities		(1,935	)		(859	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents		116			(423	)

Net Increase in Cash and Cash Equivalents		3,011			618
Cash and Cash Equivalents at Beginning of Period		19,646			1,531
Cash and Cash Equivalents at End of Period	$	22,657		$	2,149

Supplemental Disclosure of Cash Flow Activity:
Cash paid during the period for:
Interest	$	259		$	816
Income Taxes, net	$	63		$	107
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Common stock issued for acquisitions	$	32,781		$	6,831
Assets acquired and liabilities assumed in business combinations:
Accrued holdback and contingent consideration related to acquisitions	$	1,250		$	-
Contingent consideration treated as equity related to acquisitions	$	750		$	-
Balance Sheet Reclassification of Property and Equipment, net to Inventory	$	410		$	230

See accompanying notes to consolidated financial statements.

Table of Contents

TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In Thousands, Except Par Value Amounts)

(Unaudited)

							*Capital*
	*Common Stock*						In			*Accumulated*
	*Issued*						*Excess*			*Other*
	*$0.50 Par Value*						*of Par*			*Comprehensive*			*Retained*
	*Shares*			*Amount*			*Value*			*(Loss)*			*Earnings*			*Total*
Balance as of March 25, 2023		7,562		$	3,781		$	27,886		$	(1,200	)	$	69,163		$	99,630
Issuance of Common Stock		82			42			6,988			-			-			7,030
Repurchase of Common Stock		(3	)		(2	)		(86	)		-			(213	)		(301	)
Stock-Based Compensation		2			1			929			-			-			930
Other Comprehensive Income		-			-			-			482			-			482
Net Income		-			-			-			-			2,949			2,949
Balance as of June 24, 2023		7,643		$	3,822		$	35,717		$	(718	)	$	71,899		$	110,720

							*Capital*
	*Common Stock*						In			*Accumulated*
	*Issued*						*Excess*			*Other*
	*$0.50 Par Value*						*of Par*			*Comprehensive*			*Retained*
	*Shares*			*Amount*			*Value*			*(Loss)*			*Earnings*			*Total*
Balance as of March 30, 2024		8,839		$	4,420		$	141,624		$	(949	)	$	80,074		$	225,169
Issuance of Common Stock		302			151			32,888			-			-			33,039
Contingent Consideration Classified as Equity		-			-			750			-			-			750
Repurchase of Common Stock		(13	)		(7	)		(652	)		-			(961	)		(1,620	)
Stock-Based Compensation		16			8			689			-			-			697
Other Comprehensive Loss		-			-			-			(155	)		-			(155	)
Net Income		-			-			-			-			4,408			4,408
Balance as of June 29, 2024		9,144		$	4,572		$	175,299		$	(1,104	)	$	83,521		$	262,288

See accompanying notes to consolidated financial statements.

Table of Contents

TRANSCAT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – GENERAL

Description of Business: Transcat, Inc. (“Transcat,” “we,” “us,” “our” or the “Company”) is a leading provider of accredited calibration services, cost control and optimization services, and distribution and rental of value-added professional grade handheld test, measurement and control instrumentation. The Company is focused on providing services and products to highly regulated industries, particularly the life science industry, which includes pharmaceutical, biotechnology, medical device and other FDA-regulated businesses. Additional industries served include industrial manufacturing; energy and utilities, including oil and gas; chemical manufacturing; FAA-regulated businesses, including aerospace and defense and other industries that require accuracy in their processes, confirmation of the capabilities of their equipment, and for which the risk of failure is very costly.

Basis of Presentation: Transcat’s unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended March 30, 2024 (“fiscal year 2024”) contained in the Company’s Annual Report on Form 10-K for fiscal year 2024 filed with the SEC.

Use of Estimates: The preparation of Transcat’s Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States ("GAAP") requires that the Company make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for, but not limited to, allowance for credit losses and returns, inventory reserves, estimated levels of achievement for performance-based restricted stock units, fair value of stock options, depreciable lives of fixed assets, estimated lives of intangible assets, fair value of the goodwill reporting units, and the valuation of assets acquired, liabilities assumed and consideration transferred in business acquisitions. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the Consolidated Financial Statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. Actual results could differ from those estimates. Such changes and refinements in estimation methodologies are reflected in reported results of operations in the period in which the changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements.

Cash and Cash Equivalents: Cash equivalents consist of highly liquid investments with an original maturity when purchased of three months or less and are stated at cost, which approximates fair value.

Marketable Securities: Marketable securities consist of highly liquid investments with an original maturity when purchased of more than three months and are stated at fair value on the Consolidated Balance Sheets. These securities are considered trading securities. Earnings on the marketable securities are included in interest income in the Consolidated Statements of Income.

Revenue Recognition: Distribution non-rental sales are recorded when an order’s title and risk of loss transfers to the customer, which is generally upon shipment. Distribution rental sales are recognized over time using the time-elapsed output method as this portrays the transfer of control to the customer. The Company recognizes the majority of its Service revenue based upon when the calibration or other activity is performed and then shipped and/or delivered to the customer. The majority of the Company’s revenue generating activities have a single performance obligation and are recognized at the point in time when control transfers and/or our obligation has been fulfilled. Some Service revenue is generated from managing customers’ calibration programs in which the Company recognizes revenue over time using the time-elapsed output method as this portrays the transfer of control to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for product shipped or services performed. Sales taxes and other taxes billed and collected from customers are excluded from revenue. The Company generally invoices its customers for freight, shipping, and handling charges. Freight billed to customers is included in revenue. Shipping and handling is not included in revenue. Provisions for customer returns are provided for in the period the related revenue is recorded based upon historical data.

Table of Contents

Under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers, we use judgments that could potentially impact both the timing of our satisfaction of performance obligations. Such judgments include considerations in determining our transaction prices and when our performance obligations are satisfied for our standard product sales that include general payment terms that are between net 30 and 90 days.

Revenue recognized from prior period performance obligations for the first quarter of the fiscal year ending March 29, 2025 (“fiscal year 2025”) was immaterial. As of June 29, 2024, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to ASC Topic 606, the Company applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. Deferred revenue, unbilled revenue and deferred contract costs recorded on our Consolidated Balance Sheets as of June 29, 2024 and March 30, 2024 were immaterial. See Note 4 for disaggregated revenue information.

	% of Total Net Sales
	June 29,			June 24,
	2024			2023
Point-in-Time		85.6	%		90.7	%
Over Time - Output Method		14.4	%		9.3	%
Total		100.0	%		100.0	%

Fair Value of Financial Instruments: Transcat has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. Level 1 uses observable inputs such as quoted prices in active markets; Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. The carrying amount of debt on the Consolidated Balance Sheets approximates fair value due to variable interest rate pricing on a portion of the debt with the balance bearing an interest rate approximating current market rates, and the carrying amounts for cash and cash equivalents, marketable securities, accounts receivable and accounts payable approximate fair value due to their short-term nature. Investment assets, which fund the Company’s non-qualified deferred compensation plan, consist of mutual funds and are valued based on Level 1 inputs. At each of June 29, 2024 and March 30, 2024, investment assets totaled $0.1 million, and are included as a component of other assets (non-current) on the Consolidated Balance Sheets.

Stock-Based Compensation: The Company measures the cost of services received in exchange for all equity awards granted, including stock options and restricted stock units, based on the fair market value of the award as of the grant date. The Company records compensation cost related to unvested equity awards by recognizing, on a straight-line basis, the unamortized grant date fair value over the remaining service period for awards expected to vest. Excess tax benefits for share-based award activity are reflected in the Consolidated Statements of Income as a component of the provision for income taxes. Excess tax benefits are realized benefits from tax deductions for exercised awards in excess of the deferred tax asset attributable to stock-based compensation costs for such awards. The Company did not capitalize any stock-based compensation costs as part of an asset. The Company estimates forfeiture rates based on its historical experience. During the first quarter of fiscal year 2025 and fiscal year 2024, the Company recorded non-cash stock-based compensation cost of $0.7 million and $0.9 million, respectively, in the Consolidated Statements of Income.

Foreign Currency Translation and Transactions: The accounts of Cal OpEx Limited (d/b/a Transcat Ireland), an Irish company, and Transcat Canada Inc., both of which are wholly-owned subsidiaries of the Company, are maintained in their local currencies, the Euro and the Canadian dollar, respectively, and have been translated to U.S. dollars. Accordingly, the amounts representing assets and liabilities have been translated at the period-end rates of exchange and related revenue and expense accounts have been translated at an average rate of exchange during the period. Gains and losses arising from translation of Cal OpEx Limited’s and Transcat Canada Inc.’s financial statements into U.S. dollars are recorded directly to the accumulated other comprehensive loss component of shareholders’ equity.

Table of Contents

Transcat records foreign currency gains and losses on business transactions denominated in foreign currency. The net foreign currency was a net loss of $0.1 million for each of the first quarter of fiscal year 2025 and fiscal year 2024. The Company continually utilizes short-term foreign exchange forward contracts to reduce the risk that its future earnings denominated in Canadian dollars would be adversely affected by changes in currency exchange rates. The Company does not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million during each of the first quarter of fiscal years 2025 and 2024, was recognized as a component of Interest and Other Expenses, net in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On June 29, 2024, the Company had a foreign exchange contract, which matured in July 2024, outstanding in the notional amount of $1.8 million. This contract was subsequently renewed and remains in place. The Company does not use hedging arrangements for speculative purposes.

Earnings Per Share: Basic earnings per share of the Company's common stock, par value $0.50 per share ("common stock"), are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock reflect the assumed conversion of stock options and unvested restricted stock units using the treasury stock method in periods in which they have a dilutive effect. In computing the per share effect of assumed conversion, proceeds received from the exercise of options and unvested restricted stock units are considered to have been used to purchase shares of common stock at the average market prices during the period, and the resulting net additional shares of common stock are included in the calculation of average shares of common stock outstanding.

For the first quarter of each of fiscal years 2025 and 2024, the net additional common stock equivalents had a ($0.01) effect on the calculation of diluted earnings per share. The average shares outstanding used to compute basic and diluted earnings per share are as follows (amounts in thousands):

	*First Quarter Ended*
	*June 29,*		*June 24,*
	*2024*		*2023*
Average Shares Outstanding – Basic		9,064		7,622
Effect of Dilutive Common Stock Equivalents		132		140
Average Shares Outstanding – Diluted		9,196		7,762
Anti-dilutive Common Stock Equivalents		35		57

Goodwill and Intangible Assets: Goodwill represents the excess of the purchase price over the fair values of the underlying net assets of an acquired business. The Company tests goodwill for impairment for each reporting unit on an annual basis during the fourth quarter of its fiscal year, or immediately if conditions indicate that such impairment could exist. The Company is permitted, but not required, to qualitatively assess indicators of a reporting unit’s fair value to determine whether it is necessary to perform the two-step goodwill impairment test. If a quantitative test is deemed necessary, a discounted cash flow analysis is prepared to estimate fair value.

Intangible assets, namely customer base and covenants not to compete, represent an allocation of purchase price to identifiable intangible assets of an acquired business. Intangible assets are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. The allocation of goodwill and intangible assets by segment for the fiscal year 2025 additions are preliminary. A summary of changes in the Company’s goodwill and intangible assets is as follows (amounts in thousands):

	*Goodwill*								*Intangible Assets*
	*Distribution*		*Service*			*Total*			*Distribution*			*Service*			*Total*
Net Book Value as of March 30, 2024	$	38,216	$	67,369		$	105,585		$	6,993		$	12,994		$	19,987
Additions		21,746		10,876			32,622			5,360			2,680			8,040
Amortization		-		-			-			(665	)		(1,108	)		(1,773	)
Currency Translation Adjustment		-		(61	)		(61	)		-			-			-
Net Book Value as of June 29, 2024	$	59,962	$	78,184		$	138,146		$	11,688		$	14,566		$	26,254

Table of Contents

Other Liabilities: A summary of other current and non-current liabilities is as follows (amounts in thousands):

	(Unaudited)		(Audited)
	*June 29,*		*March 30,*
	*2024*		*2024*
Current Liabilities:
Accrued Payroll and Employee Benefits	$	4,074	$	5,508
Accrued Incentives		986		4,182
Current Portion of Lease Liabilities		3,177		2,510
Accrued Acquisition Holdbacks		3,216		2,577
Accrued Sales Tax		727		813
Accrued Contingent Consideration		-		529
Other Current Liabilities		497		620
Accrued Compensation and Other Current Liabilities	$	12,677	$	16,739

Non-Current Liabilities:
Postretirement Benefit Obligation	$	1,130	$	1,134
Accrued Acquisition Holdbacks		1,647		1,647
Accrued Contingent Consideration		750		-
Other Non-Current Liabilities		130		122
Other Liabilities	$	3,657	$	2,903

Recent Accounting Guidance Not Yet Adopted: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The ASU requires disclosures, on an annual and interim basis, of significant segment expenses and other segment items that are regularly provided to the Chief Operating Decision Maker ("CODM") as well as the title and position of the CODM. ASU 2023-07 is effective for annual periods beginning in fiscal 2025 with early adoption permitted. The adoption of this ASU is expected to impact the Company's financial statement disclosures but have no material impact on our results of operations, cash flows or financial condition.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU expands the income tax disclosure requirements, principally related to the rate reconciliation table and income taxes paid. ASU 2023-09 is effective for annual periods beginning in fiscal 2026, with early adoption permitted. The adoption of the ASU is not expected to have a material impact on the Company’s financial statement disclosures.

Table of Contents

NOTE 2 – LONG-TERM DEBT

On July 7, 2021, the Company entered into the Second Amended and Restated Credit Facility Agreement (the “Credit Agreement”) with Manufacturers and Traders Trust Company (“M&T”), that amended and restated in its entirety the Company’s prior credit agreement with M&T.

The Credit Agreement provides for a revolving credit commitment (the “revolving credit facility”) of $80.0 million through June 2026, with a letter of credit subfacility of $10.0 million. The Company's 2018 term loan, with an original principal amount of $15.0 million (the "2018 Term Loan"), is also provided for under the Credit Agreement.

The Credit Agreement allows the Company to use up to $50.0 million under the revolving credit facility for acquisitions in any single fiscal year. The Credit Agreement restricts the Company's ability to complete acquisitions of businesses with a principal place of business located in the United Kingdom or the European Union to an aggregate purchase price of $40.0 million during the term of the Credit Agreement, if the acquisition is financed directly or indirectly with the revolving credit facility.

Under the Credit Agreement, the Company may make restricted payments up to $25.0 million in the aggregate over the term of the Credit Agreement and $10.0 million in any single fiscal year to repurchase shares and pay dividends.

As of June 29, 2024, $80.0 million was available for borrowing under the revolving credit facility. As of June 29, 2024, there were no amounts outstanding under the revolving credit facility.

As of June 29, 2024, $3.6 million was outstanding on the 2018 Term Loan, of which $2.4 million was included in current liabilities on the Consolidated Balance Sheets with the remainder included in long-term debt. The 2018 Term Loan requires total amortizing repayments (principal plus interest) of $0.2 million per month through its maturity date in December 2025.

Interest and Other Costs: Effective July 1, 2023, interest on outstanding borrowings under the revolving credit facility accrue, at Transcat’s election, at either the variable Daily Simple SOFR or a fixed rate for a designated period at the SOFR corresponding to such period (subject to a 0.25% floor), in each case, plus a margin. Unused fees accrue based on the average daily amount of unused credit available on the revolving credit facility. Interest rate margins and unused fees are determined on a quarterly basis based upon the Company’s calculated leverage ratio. The Company’s interest rate for the revolving credit facility for the first quarter of fiscal year 2025 was 7.1%. Interest on outstanding borrowings under the 2018 Term Loan accrue at a fixed rate of 3.90% over the term of the loan.

Covenants: The Credit Agreement has certain covenants with which the Company must comply, including a fixed charge ratio covenant, which prohibits the Company's fixed charge ratio from being less than 1.15 to 1.00, and a leverage ratio covenant, which prohibits the Company's leverage ratio from exceeding 3.00 to 1.00. The Company was in compliance with all loan covenants and requirements during the first three months of fiscal year 2025. The Company's leverage ratio, as defined in the Credit Agreement, was 0.08 at June 29, 2024, compared with 0.10 at March 30, 2024.

Other Terms: The Company has pledged all of its U.S. tangible and intangible personal property, the equity interests of its U.S.-based subsidiaries, and a majority of the common stock of Transcat Canada Inc. as collateral security for the loans made under the revolving credit facility.

Table of Contents

NOTE 3 – STOCK-BASED COMPENSATION

In September 2021, the Transcat, Inc. 2021 Stock Incentive Plan (the “2021 Plan”) was approved by shareholders and became effective. The 2021 Plan replaced the Transcat, Inc. 2003 Incentive Plan (the “2003 Plan”). Shares available for grant under the 2021 Plan include any shares remaining available for issuance under the 2003 Plan and any shares that are subject to outstanding awards under the 2003 Plan that are subsequently canceled, expired, forfeited, or otherwise not issued or are settled in cash. The 2021 Plan provides for, among other awards, grants of restricted stock units and stock options to directors, officers and key employees at the fair market value at the date of grant. At June 29, 2024, 0.6 million shares of common stock were available for future grant under the 2021 Plan.

The Company receives an excess tax benefit related to restricted stock vesting and stock options exercised and redeemed. The discrete tax benefits related to share-based compensation and stock option activity during the first quarter of fiscal year 2025 and fiscal year 2024 were $0.6 million and $0.1 million, respectively.

Restricted Stock Units: The Company grants time-based and performance-based restricted stock units as a component of executive and key employee compensation. Expense for restricted stock unit grants is recognized on a straight-line basis for the service period of the stock award based upon fair value of the award on the date of grant. The fair value of the restricted stock unit grants is the quoted market price for the Company’s common stock on the date of grant. These restricted stock units are either time vested, or vest following the third fiscal year from the date of grant subject to cumulative diluted earnings per share or cumulative Adjusted EBITDA targets over the eligible period.

Compensation cost ultimately recognized for performance-based restricted stock units will equal the grant date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, the Company records compensation cost based on the estimated level of achievement of the performance conditions. The expense relating to the time vested restricted stock units is recognized on a straight-line basis over the requisite service period for the entire award.

The following table summarizes the non-vested restricted stock units outstanding as of June 29, 2024 (in thousands, except per unit data):

		*Total*	*Grant Date*		*Estimated*
		*Number*	*Fair*		*Level of*
Date	*Measurement*	*of Units*	*Value*		*Achievement at*
Granted	*Period*	*Outstanding*	*Per Unit*		*June 29, 2024*
October 2018	October 2018 – September 2028	5	$	20.81	Time Vested
September 2021	September 2021 – September 2024	4	$	67.76	Time Vested
March 2022	March 2022 – March 2025	1	$	76.31	Time Vested
May 2022	May 2022 – March 2025	8	$	63.17	55% of target level
May 2022	May 2022 – March 2025	9	$	63.17	Time Vested
August 2022	August 2022 – August 2025	1	$	78.04	Time Vested
December 2022	December 2022 – December 2025	1	$	67.48	Time Vested
May 2023	May 2023 – March 2026	8	$	89.70	150% of target level
May 2023	May 2023 – March 2026	8	$	89.70	Time Vested
May 2023	May 2023 – May 2026	13	$	89.70	Time Vested
August 2023	August 2023 – August 2024	6	$	90.56	Time Vested
September 2023	September 2023 – September 2024	4	$	109.55	Time Vested
April 2024	April 2024 - April 2027	2	$	107.13	Time Vested
April 2024	April 2024 - April 2027	1	$	108.04	Time Vested
May 2024	May 2024 - May 2027	1	$	119.45	Time Vested
May 2024	May 2024 - May 2027	1	$	124.12	Time Vested
May 2024	May 2024 - March 2027	9	$	124.12	100% of target level
May 2024	May 2024 - March 2027	10	$	124.12	Time Vested

Table of Contents

Total expense relating to restricted stock units, based on grant date fair value and the achievement criteria, was $0.3 million and $0.6 million in the first quarter of fiscal year 2025 and fiscal year 2024, respectively. As of June 29, 2024, unearned compensation, to be recognized over the grants’ respective service periods, totaled $4.8 million based on estimated achievement levels as of June 29, 2024. If the maximum performance levels were achieved, the unearned compensation could be a maximum of $5.8 million.

Stock Options: The Company grants stock options to employees and directors with an exercise price equal to the quoted market price of the Company’s stock at the date of the grant. The fair value of stock options is estimated using the Black-Scholes option pricing formula that requires assumptions for expected volatility, expected dividends, the risk-free interest rate and the expected term of the option. Expense for stock options is recognized on a straight-line basis over the requisite service period for each award. Options vest either immediately or over a period of up to five years using a straight-line basis and expire either five years or ten years from the date of grant.

We calculate the fair value of the stock options granted using the Black-Scholes model. The following weighted-average assumptions were used to value options granted during the first quarter of fiscal year 2025 and fiscal year 2024:

	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*

Risk-Free Interest Rate		4.74	%		3.43	%
Volatility Factor		41.41	%		37.16	%
Expected Term (in Years)		4.00			6.19
Annual Dividend Rate		0.00	%		0.00	%

We calculate expected volatility for stock options by taking an average of historical volatility over the expected term. The computation of expected term was determined based on safe harbor rules, giving consideration to the contractual terms of the stock-based awards and vesting schedules. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield in effect at the time of grant. We assume no expected dividends. Under FASB ASC Topic 718, Compensation – Stock Compensation, the Company has elected to account for forfeitures as they occur.

During the first quarter of fiscal year 2025, the Company granted options for 4,000 shares of common stock in the aggregate to Company employees that vest over three years.

During the first quarter of fiscal year 2024, the Company granted options for 6,000 shares of common stock in the aggregate to Company employees that vest over three years and an option for 10,000 shares of common stock to a Company director that vests over five years.

The expense related to all stock option awards was $0.4 million in the first three months of fiscal year 2025 and $0.3 million in the first three months of fiscal year 2024.

Table of Contents

The following table summarizes the Company’s options as of and for the first quarter ended June 29, 2024 (in thousands, except price per option data and years):

				*Weighted*		*Weighted*
				*Average*		*Average*
	*Number*			*Exercise*		*Remaining*		*Aggregate*
	Of			*Price Per*		*Contractual*		*Intrinsic*
	*Options*			*Option*		*Term (in years)*		*Value*
Outstanding as of March 30, 2024		234		$	63.43
Granted		4		$	108.04
Exercised		(4	)	$	24.30
Forfeited		(12	)	$	52.64
Outstanding as of June 29, 2024		222		$	64.91		5	$	12,159
Exercisable as of June 29, 2024		63		$	36.21		5	$	4,750

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal year 2025 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all holders exercised their options on June 29, 2024. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock.

Total unrecognized compensation cost related to non-vested stock options as of June 29, 2024 was $2.3 million, which is expected to be recognized over a period of three years. The aggregate intrinsic value of stock options exercised during the first quarter of fiscal year 2025 was $0.4 million and during the first quarter of fiscal year 2024 was $0.2 million. Cash received from the exercise of options in each of the first quarter of fiscal year 2025 and fiscal year 2024 was less than $0.1 million.

Table of Contents

NOTE 4 – SEGMENT INFORMATION

The basis for determining our operating segments is the manner in which financial information is used in monitoring our operations. Transcat has two reportable segments: Service and Distribution. Through our Service segment, we offer calibration, repair, inspection, analytical qualifications, preventative maintenance, consulting and other related services. Through our Distribution segment, we sell and rent national and proprietary brand instruments to customers globally. The Company has no inter-segment sales. We believe that reporting performance at the operating income level is the best indicator of segment performance. The following table presents segment and geographic data for the first quarter of fiscal year 2025 and fiscal year 2024 (dollars in thousands):

	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*
Revenue:
Service	$	43,778		$	39,853
Distribution		22,929			20,745
Total		66,707			60,598

Gross Profit:
Service		14,883			12,971
Distribution		7,772			5,739
Total		22,655			18,710

Operating Expenses:
Service ⁽¹⁾		10,793			9,779
Distribution ⁽¹⁾		6,763			4,291
Total		17,556			14,070

Operating Income:
Service		4,090			3,192
Distribution		1,009			1,448
Total		5,099			4,640

Unallocated Amounts:
Interest and Other (Income)/Expense, net		(129	)		878
Provision for Income Taxes		820			813
Total		691			1,691

Net Income	$	4,408		$	2,949

Geographic Data:
Revenues to Unaffiliated Customers ⁽²⁾
United States ⁽³⁾	$	60,741		$	54,257
Canada		4,472			4,247
Other International		1,494			2,094
Total	$	66,707		$	60,598

⁽¹⁾	Operating expense allocations between segments are based on actual amounts, a percentage of revenues, headcount, and management’s estimates.

⁽²⁾	Revenues are attributed to the countries based on the destination of a product shipment or the location where service is rendered.

⁽³⁾	United States includes Puerto Rico.

Table of Contents

NOTE 5 – BUSINESS ACQUISITIONS

Becnel: Effective April 15, 2024, the Company acquired Becnel Rental Tools, LLC, a privately-held Louisiana limited liability company (“Becnel”), pursuant to an Agreement and Plan of Merger (the “Becnel agreement”), by and among the Company, Becnel and the other parties thereto. Becnel is an ISO 9001:2015 certified provider of rental tools and services primarily utilized in the decommissioning and maintenance of oil wells. This transaction aligned with a key component of the Company’s acquisition strategy of targeting businesses that expand the depth and breadth of the Company’s service and rental capabilities.

The Becnel goodwill is primarily attributable to the workforce acquired, as well as operational synergies and other intangibles that do not qualify for separate recognition. The goodwill and intangible assets relating to the Becnel acquisition have preliminarily been allocated to both the Service and Distribution segment. Intangible assets related to the Becnel acquisition are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to eleven years and are deductible for tax purposes. Amortization of goodwill related to the Becnel acquisition is deductible for income tax purposes.

The total purchase price for Becnel was approximately $49.9 million and will be up to $17.5 million in cash and the issuance of our common stock valued at $32.3 million. Pursuant to the Becnel agreement, the Company held back approximately $2.5 million of the purchase price for certain potential post-closing adjustments. This includes $0.5 million withheld for ordinary post-closing adjustments and $2.0 million withheld that is subject to revenue target achievement.

Pursuant to the Becnel agreement, the purchase price is subject to reduction by $2.0 million if certain revenue targets are not met through April 15, 2026. As of April 15, 2024 and June 29, 2024, the estimated fair value of this contingent consideration, classified as Level 3 in the fair value hierarchy, was approximately $1.5 million. This amount was calculated using a Geometric Brownian motion distribution that was then used in a Monte Carlo simulation model. Assumptions used in the Monte Carlo simulation model included: 1) discount rate of 11.00%, 2) risk-free interest rate of 5.00%, 3) asset volatility of 30.00%, and 4) forecasted revenue. 50% of this contingent consideration is payable in cash and 50% of this contingent consideration is payable in 9,283 shares of Transcat common stock. The cash portion of the contingent consideration is classified as a liability and is recorded in other liabilities in the Consolidated Balance Sheets. The stock portion of the contingent consideration is classified as equity and is recorded in shareholders equity in the Consolidated Balance Sheets. The contingent consideration payout will either be $0 or $2.0 million depending on the revenue target achievement.

This cash portion of the contingent consideration is remeasured quarterly. If, as a result of remeasurement, the value of the cash portion of the contingent consideration changes, any charges or income will be included in the Company’s Consolidated Statements of Income. Due to the uncertainty with utilizing these significant unobservable inputs for this Level 3 fair value measurement, materially higher or lower fair value measurements may be recognized at subsequent remeasurement periods. The stock portion of the contingent consideration is remeasured quarterly. If, as a result of the measurement, the value of the stock portion of the contingent consideration changes. any changes will be included in the Consolidated Balance Sheets as a component of shareholders equity.

The purchase price allocation is subject to revision based upon our final review of tangible and intangible asset valuation assumptions, working capital adjustments, assets acquired, liabilities assumed and consideration transferred. The following is a summary of the preliminary purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of Becnel's assets and liabilities acquired on April 15, 2024 (in thousands):

Goodwill		$32,659
Intangible Assets – Customer Base & Contracts			7,200
Intangible Assets – Trademarks and Tradenames			840
			40,699

Plus:	Cash		197
	Accounts Receivable		3,041
	Property and Equipment		6,122
	Other Current Assets		95
Less:	Current Liabilities		(253	)
Total Purchase Price		$	49,901

From the date of acquisition through the end of the first quarter of fiscal year 2025, Becnel has contributed revenue of $2.7 million and operating income of $0.6 million, which includes the negative impact of amortization of the acquired intangible assets.

Axiom: Effective August 8, 2023, Transcat purchased all of the outstanding capital stock of Axiom Test Equipment, Inc. (“Axiom”), a privately-held California rental provider of electronic test equipment to customers across the United States. This transaction aligned with a key component of the Company’s acquisition strategy of targeting businesses that expand the depth and breadth of the Company’s Distribution capabilities.

The Axiom goodwill is primarily attributable to the workforce acquired, as well as operational synergies and other intangibles that do not qualify for separate recognition. All the goodwill and intangible assets relating to the Axiom acquisition has been allocated to the Distribution segment. Intangible assets related to the Axiom acquisition are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to twelve years and are not deductible for tax purposes. Amortization of goodwill related to the Axiom acquisition is not deductible for tax purposes.

The total purchase price for Axiom was approximately $38.7 million and was paid with $10.0 million in cash and the issuance of our common stock valued at $28.6 million. Pursuant to the asset purchase agreement, the Company held back approximately $3.9 million of the purchase price for certain potential post-closing adjustments.

The following is a summary of the purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of Axiom's assets and liabilities acquired on August 8, 2023 (in thousands):

Goodwill		$	26,758
Intangible Assets – Customer Base & Contracts			7,900
			34,658
Plus:	Cash		161
	Accounts Receivable		925
	Inventory		1,796
	Other Current Assets		40
	Property and Equipment		4,965
Less:	Current Liabilities		(579	)
	Deferred Tax Liability		(3,242	)
Total Purchase Price		$	38,724

During the first quarter of fiscal year 2025, Axiom has contributed revenue of $2.6 million and operating income of $0.4 million, which includes the negative impact of amortization of the acquired intangible assets.

SteriQual: Effective July 12, 2023, Transcat purchased all of the outstanding capital stock of SteriQual, Inc. (“SteriQual”), a Florida based provider of expert consulting services to pharmaceutical, biopharmaceutical, medical device and diagnostic equipment manufacturers. This transaction aligned with a key component of the Company’s acquisition strategy of targeting businesses that expand the depth and breadth of the Company’s Service capabilities.

The SteriQual goodwill is primarily attributable to the workforce acquired, as well as operational synergies and other intangibles that do not qualify for separate recognition. All the goodwill and intangible assets relating to the SteriQual acquisition has been allocated to the Service segment. Intangible assets related to the SteriQual acquisition are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to fifteen years and are not deductible for tax purposes. Amortization of goodwill related to the SteriQual acquisition is not deductible for tax purposes.

The total purchase price for SteriQual was approximately $4.3 million and was paid by the issuance of our common stock. Pursuant to the asset purchase agreement, the Company held back approximately $0.9 million of the purchase price for certain potential post-closing adjustments. Pursuant to the asset purchase agreement, the purchase price is subject to reduction by $0.5 million if certain revenue targets are not met through July 12, 2024. This contingent consideration is remeasured quarterly. If, as a result of remeasurement, the value of the contingent consideration changes, any charges or income will be included in the Company’s Consolidated Statements of Income. The purchase price was reduced to $3.8 million as of December 23, 2023 as the Company recorded a receivable in the amount of $0.5 million related to the revenue target contingent consideration. This receivable was recognized based on the facts and circumstances at the date of acquisition and is recognized as a component of goodwill and not recorded in the Consolidated Statement of Income.

Table of Contents

The following is a summary of the purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of SteriQual's assets and liabilities acquired on July 12, 2023 (in thousands):

Goodwill		$	2,175
Intangible Assets – Customer Base & Contracts			1,062
Intangible Assets – Covenant Not to Compete			392
Intangible Assets – Sales Backlog			95
			3,724
Plus:	Accounts Receivable		666
Less:	Current Liabilities		(211	)
	Deferred Tax Liability		(395	)
Total Purchase Price		$	3,784

During the first quarter of fiscal year 2025, SteriQual has contributed revenue of $0.5 million and operating loss of less than $0.1 million, which includes the negative impact of amortization of the acquired intangible assets.

TIC-MS: Effective March 27, 2023, Transcat purchased all of the outstanding capital stock of TIC-MS, Inc. (“TIC-MS”), a Missouri based provider of calibration services. This transaction aligned with a key component of the Company’s acquisition strategy of targeting businesses that expand the depth and breadth of the Company’s Service capabilities.

The TIC-MS goodwill is primarily attributable to the workforce acquired, as well as operational synergies and other intangibles that do not qualify for separate recognition. All the goodwill and intangible assets relating to the TIC-MS acquisition has been allocated to the Service segment. Intangible assets related to the TIC-MS acquisition are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to fifteen years and are not deductible for tax purposes. Amortization of goodwill related to the TIC-MS acquisition is not deductible for tax purposes.

The total purchase price for TIC-MS was approximately $9.7 million and was paid with $2.9 million in cash, including $0.5 million placed in escrow for contingent consideration, certain post-closing adjustments and indemnification claims, if any, and the issuance of 77,387 shares of our common stock valued at $6.9 million. Pursuant to the asset purchase agreement, the purchase price was subject to reduction by up to $0.5 million if a key customer relationship is not retained through March 27, 2024. This key customer relationship was retained and, in the first quarter of fiscal year 2025 the $0.5 million in escrow was released and paid.

The following is a summary of the purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of TIC-MS's assets and liabilities acquired on March 27, 2023 (in thousands):

Goodwill		$	7,218
Intangible Assets – Customer Base & Contracts			2,303
Intangible Assets – Covenant Not to Compete			132
			9,653
Plus:	Accounts Receivable		502
	Property and Equipment		356
Less:	Current Liabilities		(124	)
	Deferred Tax Liability		(712	)
Total Purchase Price		$	9,675

During the first quarter of fiscal year 2025, TIC-MS has contributed revenue of $0.9 million and operating income of $0.4 million, which includes the negative impact of amortization of the acquired intangible assets.

Table of Contents

The results of acquired businesses are included in Transcat’s consolidated operating results as of the dates the businesses were acquired. The following unaudited pro forma information presents the Company’s results of operations as if the acquisitions of Becnel, Axiom, SteriQual and TIC-MS had occurred at the beginning of fiscal year 2024. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transactions had occurred at the beginning of the period presented or what the Company’s operating results will be in future periods.

	(Unaudited)
	*First Quarter Ended*
(in thousands except per share information)	*June 29, 2024*		*June 24, 2023*

Total Revenue	$	66,727	$	68,374
Net Income	$	4,420	$	3,790
Basic Earnings Per Share	$	0.49	$	0.50
Diluted Earnings Per Share	$	0.48	$	0.49

Certain of the Company’s acquisition agreements include provisions for contingent consideration and other holdback amounts. The Company accrues for contingent consideration and holdback provisions based on their estimated fair value at the date of acquisition and at subsequent remeasurement periods, as applicable. As of June 29, 2024, $3.2 million of other holdback amounts unpaid are reflected in current liabilities on the Consolidated Balance Sheets and $0.8 million of contingent consideration and $1.6 million of other holdback amounts unpaid are reflected in other liabilities on the Consolidated Balance Sheets. During the first quarter of fiscal year 2025, $0.5 million was paid to settle the earn-out obligation due to Cal OpEx Limited (d/b/a NEXA Enterprise Asset Management)(“NEXA”) for calendar 2023. This amount was paid in 4,320 shares of Transcat common stock. During the first quarter of fiscal year 2024, no contingent consideration and $0.3 million of other holdback amounts were paid.

During the first quarter of fiscal year 2025 and fiscal year 2024, acquisition costs of $0.4 million and $0.2 million, respectively, were recorded as incurred as general and administrative expenses in the Consolidated Statements of Income.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements. This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, estimates, beliefs, assumptions and predictions of future events and are identified by words such as “anticipate,” “believes,” “estimates,” “expects,” “potential,” “outlook,” “seek,” “strategy,” “target,” “could,” “may,” “will,” “would,” and other similar words. Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or those expressed in such forward-looking statements. You should evaluate forward-looking statements in light of important risk factors and uncertainties that may affect our operating and financial results and our ability to achieve our financial objectives. These factors include, but are not limited to, general economic conditions applicable to our business, inflationary impacts and changes in interest rates, the highly competitive nature of the industries in which we compete and in the nature of our two business segments, the concentration of Service segment customers in the life science and other FDA-regulated and industrial manufacturing industries, the significant competition we face in our Distribution segment, any impairment of our goodwill or intangible assets, tariffs and trade relations, our ability to successfully complete and integrate business acquisitions, cybersecurity risks, the risk of significant disruptions in our information technology systems, our ability to recruit, train and retain quality employees, skilled technicians and senior management, fluctuations in our operating results, our ability to achieve or maintain adequate utilization and pricing rates for our technical service providers, the prices we are able to charge for our services in our Service segment, competition in the rental market, our ability to adapt our technology, reliance on our enterprise resource planning system, technology updates, supply chain delays or disruptions, the risks related to current and future indebtedness, foreign currency rate fluctuations, risks related to our intellectual property, geopolitical events, adverse weather events or other catastrophes, natural disasters or widespread public health crises, the volatility of our stock price, the relatively low trading volume of our common stock, changes in tax rates, changes in accounting standards, legal requirements and listing standards, and legal and regulatory risks related to our international operations. These risk factors and uncertainties are more fully described by us under the heading “Risk Factors” in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 30, 2024. You should not place undue reliance on our forward-looking statements, which speak only as of the date they are made. Except as required by law, we undertake no obligation to update, correct or publicly announce any revisions to any of the forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting policies and estimates from the information provided in our Annual Report on Form 10-K for the fiscal year ended March 30, 2024.

RESULTS OF OPERATIONS

Executive Summary

During our first quarter of fiscal year 2025, we had consolidated revenue of $66.7 million. This represented an increase of $6.1 million or 10.1% versus the first quarter of fiscal year 2024. This increase was primarily due to acquisitions, strong demand in our Service segment’s highly-regulated end markets and increased rental sales, which includes incremental revenue from acquisitions. See Note 5 – “Business Acquisitions” to our unaudited consolidated financial statements in this report for more information about the impact of our acquisitions.

Our first quarter of fiscal year 2025 gross profit was $22.7 million. This was an increase of $3.9 million or 21.1% versus the first quarter of fiscal year 2024. In addition, consolidated gross margin was 34.0%, an increase of 310 basis points versus the first quarter of fiscal year 2024. This increase was largely the result of operating leverage on our fixed costs, increased technician productivity and accretive gross margins from our rental business.

Total operating expenses were $17.6 million in the first quarter of fiscal year 2025, an increase of $3.5 million or 24.8% when compared to the prior fiscal year first quarter. Included in operating expenses during the first quarter of fiscal year 2025 were incremental operating expenses from the acquisitions of Becnel, Axiom and SteriQual, investments in technology and higher incentive-based employee costs due to higher sales. As a percentage of total revenue, operating expenses were 26.3% in the first quarter of fiscal year 2025, up 310 basis points from 23.2% in the first quarter of fiscal year 2024. Operating income was $5.1 million, an increase of $0.5 million, or 9.9% and operating margin decreased from 7.7% to 7.6% in the first quarter of fiscal year 2025.

Net income was $4.4 million in the first quarter of fiscal year 2025 versus $2.9 million in the first quarter of fiscal year 2024. The increase was primarily due to higher operating income and lower interest expense.

Table of Contents

The following table presents, for the first quarter of fiscal year 2025 and fiscal year 2024, the components of our Consolidated Statements of Income:

	(Unaudited)
	First Quarter Ended
	June 29,			June 24,
	2024			2023
As a Percentage of Total Revenue:
Service Revenue		65.6	%		65.8	%
Distribution Sales		34.4	%		34.2	%
Total Revenue		100.0	%		100.0	%

Gross Profit Percentage:
Service Gross Profit		34.0	%		32.5	%
Distribution Gross Profit		33.9	%		27.7	%
Total Gross Profit		34.0	%		30.9	%

Selling, Marketing and Warehouse Expenses		11.7	%		10.7	%
General and Administrative Expenses		14.6	%		12.5	%
Total Operating Expenses		26.3	%		23.2	%

Operating Income		7.6	%		7.7	%

Interest and Other (Income)/Expense, net		(0.2	)%		1.4	%

Income Before Income Taxes		7.8	%		6.2	%
Provision for Income Taxes		1.2	%		1.3	%

Net Income		6.6	%		4.9	%

FIRST QUARTER ENDED June 29, 2024 COMPARED TO FIRST QUARTER ENDED June 24, 2023 (dollars in thousands):

Revenue:

	First Quarter Ended				Change
	June 29,		June 24,
	2024		2023		$		%
Revenue:
Service	$	43,778	$	39,853	$	3,925		9.8	%
Distribution		22,929		20,745		2,184		10.5	%
Total	$	66,707	$	60,598	$	6,109		10.1	%

Total revenue was $66.7 million, an increase of $6.1 million, or 10.1%, in our fiscal year 2025 first quarter compared to the prior fiscal year first quarter.

Service revenue, which accounted for 65.6% and 65.8% of our total revenue in the first quarter of fiscal years 2025 and 2024, respectively, increased $3.9 million or 9.8% from the first quarter of fiscal year 2024 to the first quarter of fiscal year 2025. This year-over-year increase included $1.3 million in revenue from the acquisitions of SteriQual and Becnel, and also included organic revenue growth of 6.4% driven by strong end-market demand and continued market share gains.

Table of Contents

Our fiscal years 2025 and 2024 Service revenue growth, in relation to prior fiscal year quarter comparisons, was as follows:

	FY 2025			FY 2024
	Q1			Q4			Q3			Q2			Q1
Service Revenue Growth		9.8	%		17.5	%		15.4	%		17.5	%		17.6	%

Within any fiscal year, while we add new customers, we also have customers from the prior fiscal year whose service orders may not repeat for any number of factors. Among those factors are variations in the timing of periodic calibrations and other services, customer capital expenditures and customer outsourcing decisions. Because the timing of Service segment orders can vary on a quarter-to-quarter basis, we believe trailing twelve-month information provides a better indication of the progress of this segment.

The following table presents the trailing twelve-month Service segment revenue for the first quarter of fiscal year 2025 and each quarter in fiscal year 2024 as well as the trailing twelve-month revenue growth as a comparison to that of the prior fiscal year period:

	FY 2025			FY 2024
	Q1			Q4			Q3			Q2			Q1
Trailing Twelve-Month:
Service Revenue	$	173,450		$	169,525		$	162,556		$	157,024		$	150,860
Service Revenue Growth		15.0	%		17.0	%		16.3	%		17.1	%		17.6	%

Our strategy has been to focus our investments in the core electrical, temperature, pressure, physical/dimensional and radio frequency/microwave calibration disciplines. We expect to subcontract approximately 13% to 15% of our Service revenue to third-party vendors for calibration beyond our chosen scope of capabilities. We continually evaluate our outsourcing needs and make capital investments, as deemed necessary, to add more in-house capabilities and reduce the need for third-party vendors. Capability expansion through business acquisitions is another way that we seek to reduce the need for outsourcing. The following table presents the source of our Service revenue and the percentage of Service revenue derived from each source for the first quarter of fiscal year 2025 and for each quarter during fiscal year 2024:

	FY 2025			FY 2024
	Q1			Q4			Q3			Q2			Q1
Percent of Service Revenue:
In-House		86.9	%		87.0	%		86.2	%		85.8	%		87.3	%
Outsourced		12.0	%		11.9	%		12.6	%		13.0	%		11.6	%
Freight Billed to Customers		1.1	%		1.1	%		1.2	%		1.2	%		1.1	%
		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Table of Contents

Our Distribution sales accounted for 34.4% of our total revenue in the first quarter of fiscal year 2025 and 34.2% of our total revenue in the first quarter of fiscal year 2024. During the first quarter of fiscal year 2025, Distribution segment sales were $22.9 million which was an increase of 10.5% or $2.2 million. This increase was due to $4.4 million of incremental revenue from the acquisitions of Axiom and Becnel offset by slower demand for our non-rental products.

The following table presents the quarterly historical trend of Distribution sales in fiscal years 2025 and 2024 compared to the prior year fiscal quarter:

	FY 2025			FY 2024
	Q1			Q4			Q3			Q2			Q1
Distribution Sales Growth (Decline)		10.5	%		8.4	%		10.4	%		0.9	%		(0.2	)%

The Distribution segment sales increase for the first quarter of fiscal year 2025 versus the first quarter of fiscal year 2024 was due to sales from the acquisitions of Axiom and Becnel.

Distribution sales orders include orders for instruments that we routinely stock in our inventory, customized products, and other products ordered less frequently, which we do not stock. Product backorders are the total dollar value of orders received for which revenue has not yet been recognized. Pending product shipments are primarily backorders, but also include products that are requested to be calibrated in our service centers prior to shipment, orders required by the customer to be shipped complete or at a future date, and other orders awaiting final credit or management review prior to shipment. Management uses pending product shipments and backorders as measures of our future business performance and financial performance within the distribution segment.

The following table presents our total pending product shipments and the percentage of total pending product shipments that were backorders at the end of the first quarter of fiscal year 2025 and each quarter of fiscal year 2024:

	FY 2025			FY 2024
	Q1			Q4			Q3			Q2			Q1
Total Pending Product Shipments	$	4,713		$	5,079		$	4,652		$	6,332		$	7,109
% of Pending Product
Shipments that were Backorders		78.4	%		88.8	%		82.0	%		87.4	%		85.0	%

Our total pending product shipments at the end of the first quarter of fiscal year 2025 were $4.7 million, a decrease of $2.4 million versus the end of the first quarter of fiscal year 2024 and a decrease of $0.4 million since March 30, 2024. The decrease in pending product shipments and backorders was a result of improved fulfillment of existing orders.

Gross Profit:

	First Quarter Ended				Change
	June 29,		June 24,
	2024		2023		$		%
Gross Profit:
Service	$	14,883	$	12,971	$	1,912		14.7	%
Distribution		7,772		5,739		2,033		35.4	%
Total	$	22,655	$	18,710	$	3,945		21.1	%

Total gross profit for the first quarter of fiscal year 2025 was $22.7 million, an increase of $3.9 million or 21.1% versus the first quarter of fiscal year 2024. Total gross margin was 34.0% in the first quarter of fiscal year 2025, up from 30.9% in the first quarter of fiscal year 2024, a 310 basis point increase.

Service gross profit in the first quarter of fiscal year 2025 increased $1.9 million, or 14.7%, from the first quarter of fiscal year 2024. Service gross margin was 34.0% in the first quarter of fiscal year 2025, a 150 basis point increase versus the 32.5% in the first quarter of fiscal year 2024. This increase in Service gross margin was the result of increased revenue, which allows us to leverage our fixed-costs, and increases in technician productivity and automation.

Table of Contents

The following table presents the quarterly historical trend of our Service gross margin as a percent of Service revenue:

	FY 2025			FY 2024
	Q1			Q4			Q3			Q2			Q1
Service Gross Margin		34.0	%		35.7	%		32.5	%		34.0	%		32.5	%

Our Distribution gross margin includes net sales less the direct cost of inventory sold and the direct costs of equipment rental revenues, primarily depreciation expense for the fixed assets in our rental equipment pool, as well as the impact of rebates and cooperative advertising income we receive from vendors, freight billed to customers, freight expenses and direct shipping costs. In general, our Distribution gross margin can vary based upon the mix of products sold, price discounting, and the timing of periodic vendor rebates offered and cooperative advertising programs from suppliers.

The following table reflects the quarterly historical trend of our Distribution gross margin as a percent of Distribution sales:

	FY 2025			FY 2024
	Q1			Q4			Q3			Q2			Q1
Distribution Gross Margin		33.9	%		30.3	%		31.5	%		28.3	%		27.7	%

Distribution segment gross margin was 33.9% in the first quarter of fiscal year 2025 versus 27.7% in the first quarter of fiscal year 2024, a 620 basis point increase. The increase in Distribution gross margin was due to increased sales from higher-margin rental sales, which now includes the acquisitions of Axiom and Becnel.

Operating Expenses:

	First Quarter Ended				Change
	June 29,		June 24,
	2024		2023		$		%
Operating Expenses:
Selling, Marketing and Warehouse	$	7,801	$	6,469	$	1,332		20.6	%
General and Administrative		9,755		7,601		2,154		28.3	%
Total	$	17,556	$	14,070	$	3,486		24.8	%

Total operating expenses were $17.6 million in the first quarter of fiscal year 2025 versus $14.1 million during the first quarter of fiscal year 2024. The year-over-year increase in selling, marketing and warehouse expenses is due to increased expenses related to recent acquisitions and higher incentive-based employee costs due to higher sales. The increase in general and administrative expenses includes incremental expenses related to acquired companies, increased payroll costs for new employees and continued investments in technology.

As a percentage of total revenue, operating expenses were 26.3% in the first quarter of fiscal year 2025 and 23.2% in the first quarter of fiscal year 2024, an increase of 310 basis points.

Income Taxes:

	First Quarter Ended				Change
	June 29,		June 24,
	2024		2023		$		%
Provision for Income Taxes	$	820	$	813	$	7		0.9	%

Our effective tax rate for the first quarter of fiscal years 2025 and 2024 was 15.7% and 21.6%, respectively. The tax provision is impacted by higher operating income and lower interest expense. The decrease in effective tax rate is due to the increase in our discrete items. Our quarterly provision for income taxes is affected by discrete items that may occur in any given period but are not consistent from year to year. The discrete benefits related to share-based compensation activity in the first quarter of fiscal years 2025 and 2024 was $0.6 million and less than $0.1 million, respectively.

Table of Contents

Net Income:

	First Quarter Ended				Change
	June 29,		June 24,
	2024		2023		$		%
Net Income	$	4,408	$	2,949	$	1,459		49.5	%

Net income for the first quarter of fiscal year 2025 increased from the first quarter of fiscal year 2024 primarily due to higher operating income and lower interest expense.

Adjusted EBITDA:

Total Adjusted EBITDA, a non-GAAP measure, for the first quarter of fiscal year 2025 was $10.2 million, an increase of $1.7 million or 20.4% versus the first quarter of fiscal year 2024. See “Non-GAAP Financial Measures” below for a description of the non-GAAP measures we use and a reconciliation to the most directly comparable GAAP measures. As a percentage of revenue, Adjusted EBITDA increased to 15.3% for the first quarter of fiscal year 2025 from 14.0% for the first quarter of fiscal year 2024. The increase in Adjusted EBITDA during the first quarter of fiscal year 2025 was primarily driven by increases in operating income, depreciation and amortization expense and acquisition transaction expenses.

Non-GAAP Financial Measures

Adjusted EBITDA

In addition to reporting net income, a GAAP measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash stock compensation expense, acquisition related transaction expenses, and other expense), which is a non-GAAP measure. Our management believes Adjusted EBITDA is an important measure of our operating performance because it allows management, investors and others to evaluate and compare the performance of our core operations from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense and other items, which is not always commensurate with the reporting period in which it is included. As such, our management uses Adjusted EBITDA as a measure of performance when evaluating our business segments and as a basis for planning and forecasting. Adjusted EBITDA is also commonly used by rating agencies, lenders and other parties to evaluate our credit worthiness.

Adjusted EBITDA is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute or alternative for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted EBITDA, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.

	First Quarter Ended
(dollars in thousands)	June 29,			June 24,
	2024			2023
Net Income	$	4,408		$	2,949
+ Interest (Income) Expense		(260	)		814
+ Other Expense		131			64
+ Tax Provision		820			813
Operating Income		5,099			4,640
+ Depreciation & Amortization		4,113			2,790
+ Transaction Expense		434			185
+ Other (Expense)		(131	)		(64	)
+ Noncash Stock Compensation		697			930
Adjusted EBITDA	$	10,212		$	8,481

Table of Contents

Adjusted Diluted Earnings Per Share

In addition to reporting Diluted Earnings Per Share, a GAAP measure, we present Adjusted Diluted Earnings Per Share (net income plus acquisition related amortization expense, acquisition related transaction expenses, acquisition related stock-based compensation and acquisition amortization of backlog; divided by the average diluted shares outstanding during the period), which is a non-GAAP measure. Our management believes Adjusted Diluted Earnings Per Share is an important measure of our operating performance because it provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance.

Adjusted Diluted Earnings Per Share is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute or alternative for the GAAP measure of Diluted Earnings Per Share and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted Diluted Earnings Per Share, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.

	First Quarter Ended
	June 29,			June 24,
	2024			2023
Net Income	$	4,408		$	2,949
+ Amortization of Intangible Assets		1,749			1,093
+ Acquisition Amortization of Backlog		24			-
+ Acquisition Deal Costs		434			367
+ Acquisition Stock Expense		234			-
+ Income Tax Effect @ 25%		(610	)		(365	)
Adjusted Net Income		6,239			4,044

Average Diluted Shares Outstanding		9,196			7,762

Diluted Earnings Per Share – GAAP	$	0.48		$	0.38

Adjusted Diluted Earnings Per Share	$	0.68		$	0.52

LIQUIDITY AND CAPITAL RESOURCES

We expect that foreseeable liquidity and capital resource requirements will be met through cash and cash equivalents, anticipated cash flows from operations and borrowings from our revolving credit facility. We believe that these sources of financing will be adequate to meet our future requirements.

Under our Second Amended and Restated Credit Facility Agreement (the “Credit Agreement”) with Manufacturers and Traders Trust Company (“M&T”), we have access to a revolving credit commitment (the “Revolving Credit Commitment”) of $80.0 million through June 2026, with a letter of credit subfacility of $10.0 million. Our 2018 term loan, with an original principal amount of $15.0 million (the “2018 Term Loan”), is also provided for under the Credit Agreement.

The Credit Agreement allows us to use up to $50.0 million under the Revolving Credit Commitment for acquisitions in any single fiscal year. The Credit Agreement restricts our ability to complete acquisitions of businesses with a principal place of business located in the United Kingdom or the European Union to an aggregate purchase price of $40.0 million during the term of the Credit Agreement, if the acquisition is financed directly or indirectly with the Revolving Credit Commitment. Under the Credit Agreement, we may make restricted payments up to $25.0 million in the aggregate over the term of the Credit Agreement and $10.0 million in any single fiscal year to repurchase shares and pay dividends.

Table of Contents

Effective July 1, 2023, interest on outstanding borrowings under the revolving credit facility accrue, at our election, at either the variable Daily Simple SOFR or a fixed rate for a designated period at the SOFR corresponding to such period (subject to a 0.25% floor), in each case, plus a margin. Unused fees accrue based on the average daily amount of unused credit available on the revolving credit facility. Interest rate margins and unused fees are determined on a quarterly basis based upon our calculated leverage ratio. Our interest rate for the revolving credit facility for the first three months of fiscal year 2025 was 7.1%. Interest on outstanding borrowings under the 2018 Term Loan accrue at a fixed rate of 3.90% over the term of the loan.

The Credit Agreement has certain covenants with which we must comply, including a fixed charge ratio covenant, which prohibits our fixed charge coverage ratio from being less than 1.15 to 1.00, and a leverage ratio covenant, which prohibits our leverage ratio from exceeding 3.00 to 1.00. We were in compliance with all loan covenants and requirements during the first three months of fiscal year 2025. Our leverage ratio, as defined in the Credit Agreement, was 0.08 at June 29, 2024, compared with 0.10 at March 30, 2024.

As of June 29, 2024, $80.0 million was available for borrowing under the revolving credit facility. As of June 29, 2024, there were no amounts outstanding under the revolving credit facility. During the first quarter of fiscal year 2025 , we used $16.0 million, drawn from cash and cash equivalents on hand for a business acquisition. During the first quarter of fiscal year 2024, we used $2.9 million, drawn from the revolving credit facility for a business acquisition.

As of June 29, 2024, $3.6 million was outstanding on the 2018 Term Loan, of which $2.4 million was included in current liabilities on the Consolidated Balance Sheets with the remainder included in long-term debt. The 2018 Term Loan requires total repayments (principal plus interest) of $0.2 million per month through December 2025.

Cash Flows: The following table is a summary of our Consolidated Statements of Cash Flows (dollars in thousands):

	Three Months Ended
	June 29,			June 24,
	2024			2023
Cash Provided by (Used in):
Operating Activities	$	8,924		$	7,536
Investing Activities	$	(4,094	)	$	(5,636	)
Financing Activities	$	(1,935	)	$	(859	)

Operating Activities: Net cash provided by operating activities was $8.9 million during the first quarter of fiscal year 2025 compared to $7.5 million of net cash provided by operating activities during the first quarter of fiscal year 2024. The year-over-year increase in cash provided by operating activities was primarily the result of changes in net working capital (defined as current assets less current liabilities). The significant working capital fluctuations were as follows:

●

Receivables: Accounts receivable decreased $0.3 million during the first quarter of fiscal year 2025 inclusive of $3.1 million of accounts receivable acquired during the period. During the first quarter of fiscal year 2024, accounts receivable decreased $2.3 million inclusive of $0.5 million of accounts receivable acquired during the period. The year-over-year variation reflects changes in the timing of collections. The following table illustrates our “days sales outstanding” as of June 29, 2024 and June 24, 2023 (dollars in thousands):

	June 29,		June 24,
	2024		2023
Net Sales, for the last two fiscal months	$	47,789	$	43,430
Accounts Receivable, net	$	48,156	$	42,356
Days Sales Outstanding		63		61

Table of Contents

●

Inventory: Our inventory strategy includes making appropriate large quantity, high dollar purchases with key manufacturers for various reasons, including maximizing on-hand availability of key products, expanding the number of SKUs stocked in anticipation of customer demand, reducing backorders for products with long lead times and optimizing vendor purchase and sales volume discounts. As a result, inventory levels may vary from quarter-to-quarter based on the timing of these large orders in relation to our quarter end. Our inventory balance increased $0.6 million during the first quarter of fiscal year 2025. Our inventory balance decreased by $1.8 million during the first quarter of fiscal year 2024 due to strategic inventory purchases during the first three months of the prior fiscal year.

●

Accounts Payable: Changes in accounts payable may or may not correlate with changes in inventory balances at any given quarter end due to the timing of vendor payments for inventory, as well as the timing of payments for outsourced Service vendors and capital expenditures. Accounts payable increased $1.5 million during the first quarter of fiscal year 2025. Accounts payable decreased $1.2 million during the first quarter of fiscal year 2024. The variances are largely due to the timing of inventory and capital expenditures and other payments in the respective periods.

●

Accrued Compensation and Other Current Liabilities: Accrued compensation and other current liabilities include, among other things, amounts paid to employees for non-equity performance-based compensation. At the end of any particular period, the amounts accrued for such compensation may vary due to many factors including changes in expected performance levels, the performance measurement period, and timing of payments to employees. During the first quarter of fiscal year 2025, accrued compensation and other current liabilities decreased by $4.1 million, inclusive of $0.1 million from assumed liabilities, contingent consideration and purchase price holdbacks from acquisition transactions. During the first quarter of fiscal year 2024, accrued compensation and other current liabilities decreased by $0.9 million. The change from the first quarter of fiscal year 2024 was largely due to the inclusion of the acquisition related transactions, partially offset by the annual payment of incentive based compensation accruals.

●

Income Taxes Payable: In any given period, net working capital may be affected by the timing and amount of income tax payments. During the first quarter of fiscal year 2025 income taxes payable increased by $0.8 million. During the first quarter of fiscal year 2024, income taxes payable increased by $0.6 million.

Investing Activities: During the first quarter of fiscal years 2025 and 2024, we invested $3.7 million and $2.8 million, respectively, in capital expenditures that was used primarily for customer-driven expansion of Service segment capabilities and our rental business.

During the first quarter of fiscal years 2025 and 2024, we used $16.0 million and $2.9 million, respectively, for business acquisitions.

During the first quarter of fiscal year 2025, we paid $0.5 million of contingent consideration relating to business acquisitions. During the first quarter of fiscal year 2024, we paid $0.3 million of other holdbacks related to business acquisitions.

Financing Activities: During the first quarter of fiscal year 2025, $0.3 million in cash was generated from the issuance of common stock. In addition, we used $0.6 million for scheduled repayments of our term loan and $1.6 million for the “net” awarding of certain share awards to cover employee tax-withholding obligations for share award and stock option activity in fiscal year 2025, which are shown as a repurchase of shares of our common stock.

During the first quarter of fiscal year 2024, $0.2 million in cash was generated from the issuance of common stock. In addition, we used $0.6 million for scheduled repayments of our term loan, $0.2 million to repay our revolving line of credit and $0.3 million for the “net” awarding of certain share awards to cover employee tax-withholding obligations for share award and stock option activity in fiscal year 2024, which are shown as a repurchase of shares of our common stock.

Table of Contents

OUTLOOK

We are proud of our dedicated team, which has consistently delivered exceptional results through various economic cycles as can be seen over the past decade and a half of profitable growth. We believe our unique value proposition drives a sustainable competitive advantage in the highly regulated markets that we serve, particularly the Life Science, Aerospace, and Defense markets, along with a growing Rentals business. We expect another year of organic Service revenue growth in the high single-digit to low double-digit range when normalized for the extra week in fiscal 2024 and gross margin expansion. Automation of our calibration processes and overall process improvement will continue to be key enablers of future margin expansion. We will continue to leverage our expertise and proven track record of successful acquisitions to drive synergistic growth opportunities with a sharp focus on integration. Our robust and diverse acquisition pipeline enables strategic, accretive acquisitions that will be a key component of our go-forward strategy.

We expect our income tax rate to range between 24% and 26% for full fiscal year 2025. This estimate includes Federal, various state, Canadian and Irish income taxes and reflects the discrete tax accounting associated with share-based payment awards.

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATES

Our exposure to changes in interest rates results from our borrowing activities. During the first quarter of fiscal year 2025, we had no borrowings under our revolving credit facility. In the event interest rates were to move by 1%, our yearly interest expense would increase or decrease by approximately $0.4 million assuming borrowings of approximately $40 million under our revolving credit facility. As of June 29, 2024, $80.0 million was available for borrowing under the revolving credit facility. As of June 29, 2024, there were no amounts outstanding under the revolving credit facility. As described above under “Liquidity and Capital Resources,” we also have a $15.0 million (original principal) term loan. The 2018 Term Loan is considered a fixed interest rate loan. As of June 29, 2024, $3.6 million was outstanding under the 2018 Term Loan and was included in long-term debt and current portion of long-term debt on the Consolidated Balance Sheets. The 2018 Term Loan requires total (principal and interest) repayments of $0.2 million per month through December 2025.

Effective July 1, 2023, at our option, we may borrow from our revolving credit facility at the variable one-month Daily Simple SOFR or at a fixed rate for a designated period at the SOFR corresponding to such period (subject to a 0.25% floor), in each case, plus a margin. Our interest rate margin is determined on a quarterly basis based upon our calculated leverage ratio. Our interest rate during the first three months of fiscal year 2025 for our revolving credit facility was 7.1%. Interest on outstanding borrowings of the 2018 Term Loan accrued at a fixed rate of 3.90% over the term of the loan. On June 29, 2024, we had no hedging arrangements in place for our revolving credit facility to limit our exposure to movements in interest rates.

FOREIGN CURRENCY

Approximately 90% of our total revenues for each of the first quarter of fiscal year 2025 and 2024 were denominated in U.S. dollars, with the remainder denominated in Canadian dollars and Euros. A 10% change in the value of the Canadian dollar to the U.S. dollar and the Euro to the U.S. dollar would impact our revenue by approximately 1%. We monitor the relationship between the U.S. dollar and the Canadian dollar and the U.S. dollar and the Euro on a monthly basis and adjust sales prices for products and services sold in Canadian dollars or Euros as we believe to be appropriate.

We continually utilize short-term foreign exchange forward contracts to reduce the risk that future earnings denominated in Canadian dollars would be adversely affected by changes in currency exchange rates. We do not apply hedge accounting and therefore the net change in the fair value of the contracts, which totaled a loss of $0.1 million in both the first quarter of fiscal years 2025 and 2024, respectively, was recognized as a component of Interest and Other Expense, net in the Consolidated Statements of Income. The change in the fair value of the contracts is offset by the change in fair value on the underlying accounts receivables denominated in Canadian dollars being hedged. On June 29, 2024, we had a foreign exchange contract, which matured in July 2024, outstanding in the notional amount of $1.8 million. The foreign exchange contract was renewed in July 2024 and continues to be in place. We do not use hedging arrangements for speculative purposes.

ITEM 4. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures. Our principal executive officer and our principal financial officer evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of such date.

Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting that occurred during the last fiscal quarter covered by this quarterly report (our first quarter of fiscal year 2025) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Table of Contents

ITEM 6. EXHIBITS

INDEX TO EXHIBITS

Exhibit No.	Description

(2)	Plan of acquisition, reorganization, arrangement, liquidation or succession

	2.1^	Agreement and Plan of Merger, dated April 15, 2024, by and among Transcat, Inc., Becnel Rental Tools, LLC, and the other parties thereto is incorporated by reference from Exhibit 2.2 to the Company’s Annual Report on Form 10-K for the year ended March 30, 2024

(10)	Material Contracts

	10.1#	Consulting Agreement, between Transcat, Inc. and Mark Doheny, dated as of April 8, 2024 is incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 8, 2024

	10.2#^	Separation Agreement, between Transcat, Inc. and Mark Doheny, dated as of April 5, 2024 is incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 8, 2024

	10.3^	Registration Rights Agreement, dated April 15, 2024, by and among Transcat, Inc., Jason Becnel, Mark Becnel, and the other parties thereto is incorporated by reference from Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the year ended March 30, 2024

	10.4	Amendment to Share Purchase Agreement dated August 31, 2021 by and among Transcat, Inc., John Cummins and Ross Lane, dated May 20, 2024, is incorporated herein by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 20, 2024 (Film No. 24964793)

(31)	Rule 13a-14(a)/15d-14(a) Certifications

	31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(32)	Section 1350 Certifications

	32.1**	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Table of Contents


(101)	Interactive Data File

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

(104)		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Exhibit filed with this report.

**	Exhibit furnished with this report.

#	Management contract or compensatory plan or arrangement

^	Schedules and similar attachments have been omitted pursuant to Item 601 (a)(5) of Regulation S-K. The Company will furnish a copy of any omitted
	schedule or similar attachment to the Securities and Exchange Commission upon request.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TRANSCAT, INC.


Date: August 7, 2024	/s/ Lee D. Rudow
	Lee D. Rudow
	President and Chief Executive Officer (Principal Executive Officer)


Date: August 7, 2024	/s/ Thomas L. Barbato
	Thomas L. Barbato
	Senior Vice President of Finance and Chief Financial Officer (Principal Financial Officer)

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lee D. Rudow, President and Chief Executive Officer of Transcat, Inc., certify that:

I have reviewed this quarterly report on Form 10-Q of Transcat, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2024

/s/ Lee D. Rudow

Lee D. Rudow

President and Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas L. Barbato, Senior Vice President of Finance and Chief Financial Officer of Transcat, Inc., certify that:

I have reviewed this quarterly report on Form 10-Q of Transcat, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2024

/s/ Thomas L. Barbato

Thomas L. Barbato

Senior Vice President of Finance and Chief Financial Officer

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Transcat, Inc., Lee D. Rudow, the Chief Executive Officer of Transcat, Inc. and Thomas L. Barbato, the Chief Financial Officer of Transcat, Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of their knowledge, that:

This quarterly report on Form 10-Q for the first quarter ended June 29, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in this quarterly report on Form 10-Q for the first quarter ended June 29, 2024 fairly presents, in all material respects, the financial condition and results of operations of Transcat, Inc.

Date: August 7, 2024

/s/ Lee D. Rudow

Lee D. Rudow

President and Chief Executive Officer

(Principal Executive Officer)

Date: August 7, 2024

/s/ Thomas L. Barbato

Thomas L. Barbato

Senior Vice President of Finance and Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Transcat, Inc. and will be retained by Transcat, Inc. and furnished to the SEC or its staff upon request.

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Jun. 29, 2024	Jul. 31, 2024
Document Information [Line Items]
Entity Central Index Key	0000099302
Entity Registrant Name	TRANSCAT INC
Amendment Flag	false
Current Fiscal Year End Date	--03-30
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2025
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 29, 2024
Document Transition Report	false
Entity File Number	000-03905
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	16-0874418
Entity Address, Address Line One	35 Vantage Point Drive
Entity Address, City or Town	Rochester
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	14624
City Area Code	585
Local Phone Number	352-7777
Title of 12(b) Security	Common Stock, $0.50 par value
Trading Symbol	TRNS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,145,144

Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

Jun. 29, 2024

Jun. 24, 2023

Revenue

^[1]

$ 66,707

$ 60,598

Cost of Service Revenue

44,052

41,888

Gross Profit

22,655

18,710

Selling, Marketing and Warehouse Expenses

7,801

6,469

General and Administrative Expenses

9,755

7,601

Total Operating Expenses

17,556

14,070

Operating Income

5,099

4,640

Interest Expense

814

Interest Income

(312)

Other Expense

131

Total Interest and Other, net

(129)

878

Income Before Provision For Income Taxes

5,228

3,762

Provision for Income Taxes

820

813

Net Income

$ 4,408

$ 2,949

Basic Earnings Per Share (in dollars per share)

$ 0.49

$ 0.39

Average Shares Outstanding (in shares)

9,064

7,622

Diluted Earnings Per Share (in dollars per share)

$ 0.48

$ 0.38

Average Shares Outstanding (in shares)

9,196

7,762

Service [Member]

Revenue

$ 43,778

$ 39,853

Cost of Service Revenue

28,895

26,882

Distribution Service [Member]

Revenue

22,929

20,745

Cost of Service Revenue

$ 15,157

$ 15,006

[1]	Revenues are attributed to the countries based on the destination of a product shipment or the location where service is rendered.

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Net Income	$ 4,408	$ 2,949
Other Comprehensive (Loss) / Income :
Currency Translation Adjustment	(161)	476
Other, net of tax effects of $2 and $2 for the first quarter ended June 29, 2024 and June 24, 2023, respectively	6	6
Total Other Comprehensive (Loss) / Income	(155)	482
Comprehensive Income	$ 4,253	$ 3,431

Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Other, tax effect	$ 2	$ 2

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 29, 2024	Mar. 30, 2024
Current Assets:
Cash and Cash Equivalents	$ 22,657	$ 19,646
Marketable Securities	0	15,533
Accounts Receivable, less allowance for credit losses of $492 and $544 as of June 29, 2024 and March 30, 2024, respectively	48,156	47,779
Other Receivables	242	506
Inventory, net	18,128	17,418
Prepaid Expenses and Other Current Assets	5,070	4,276
Total Current Assets	94,253	105,158
Property and Equipment, net	45,954	38,944
Goodwill	138,146	105,585
Intangible Assets, net	26,254	19,987
Right to Use Assets, net	17,996	16,823
Other Assets	1,049	1,055
Total Assets	323,652	287,552
Current Liabilities:
Accounts Payable	13,076	11,495
Accrued Compensation and Other Current Liabilities	12,677	16,739
Income Taxes Payable	3,687	2,926
Current Portion of Long-Term Debt	2,362	2,339
Total Current Liabilities	31,802	33,499
Long-Term Debt	1,218	1,817
Deferred Tax Liabilities, net	9,287	9,291
Lease Liabilities	15,400	14,873
Other Liabilities	3,657	2,903
Total Liabilities	61,364	62,383
Shareholders' Equity:
Common Stock, par value $0.50 per share, 30,000,000 shares authorized; 9,144,731 and 8,839,299 shares issued and outstanding as of June 29, 2024 and March 30, 2024, respectively	4,572	4,420
Capital in Excess of Par Value	175,299	141,624
Accumulated Other Comprehensive Loss	(1,104)	(949)
Retained Earnings	83,521	80,074
Total Shareholders' Equity	262,288	225,169
Total Liabilities and Shareholders' Equity	$ 323,652	$ 287,552

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 29, 2024	Mar. 30, 2024
Accounts Receivable, allowance for doubtful accounts	$ 492	$ 544
Common stock, par value (in dollars per share)	$ 0.5	$ 0.5
Common stock, shares authorized (in shares)	30,000,000	30,000,000
Common stock, shares issued (in shares)	9,144,731	8,839,299
Common stock, shares outstanding (in shares)	9,144,731	8,839,299

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Cash Flows from Operating Activities:
Net Income	$ 4,408	$ 2,949
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Net (Gain)/Loss on Disposal of Property and Equipment	(4)	8
Deferred Income Taxes	(4)	44
Depreciation and Amortization	4,113	2,790
(Recovery of)/Provision for Accounts Receivable and Inventory Reserves	(89)	138
Stock-Based Compensation Expense	697	930
Changes in Assets and Liabilities, net of acquisitions:
Accounts Receivable and Other Receivables	2,814	3,115
Inventory	(235)	1,950
Prepaid Expenses and Other Current Assets	(687)	531
Accounts Payable	1,425	(4,315)
Accrued Compensation and Other Current Liabilities	(4,273)	(1,203)
Income Taxes Payable	759	599
Net Cash Provided by Operating Activities	8,924	7,536
Cash Flows from Investing Activities:
Purchase of Property and Equipment	(3,674)	(2,767)
Business Acquisitions, net of cash acquired	(15,953)	(2,869)
Sales of Marketable Securities	15,533	0
Net Cash Used in Investing Activities	(4,094)	(5,636)
Cash Flows from Financing Activities:
Repayment of Revolving Credit Facility, net	0	(204)
Repayments of Term Loan	(576)	(553)
Issuance of Common Stock, net of direct costs	260	199
Repurchase of Common Stock	(1,619)	(301)
Net Cash Used in Financing Activities	(1,935)	(859)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	116	(423)
Net Increase in Cash and Cash Equivalents	3,011	618
Cash and Cash Equivalents at Beginning of Period	19,646	1,531
Cash and Cash Equivalents at End of Period	22,657	2,149
Supplemental Disclosure of Cash Flow Activity:
Interest	259	816
Income Taxes, net	63	107
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Common stock issued for acquisitions	32,781	6,831
Assets acquired and liabilities assumed in business combinations:
Accrued holdback and contingent consideration related to acquisitions	1,250	0
Contingent consideration treated as equity related to acquisitions	750	0
Balance Sheet Reclassification of Property and Equipment, net to Inventory	$ 410	$ 230

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Mar. 25, 2023	7,562
Balance at Mar. 25, 2023	$ 3,781	$ 27,886	$ (1,200)	$ 69,163	$ 99,630
Issuance of Common Stock (in shares)	82
Issuance of Common Stock	$ 42	6,988	0	0	7,030
Repurchase of Common Stock (in shares)	(3)
Repurchase of Common Stock	$ (2)	(86)	0	(213)	(301)
Stock-Based Compensation (in shares)	2
Stock-Based Compensation	$ 1	929	0		930
Other Comprehensive Income (Loss)	0	0	482	0	482
Net Income	$ 0	0	0	2,949	2,949
Balance (in shares) at Jun. 24, 2023	7,643
Balance at Jun. 24, 2023	$ 3,822	35,717	(718)	71,899	110,720
Balance (in shares) at Mar. 30, 2024	8,839
Balance at Mar. 30, 2024	$ 4,420	141,624	(949)	80,074	225,169
Issuance of Common Stock (in shares)	302
Issuance of Common Stock	$ 151	32,888	0	0	33,039
Repurchase of Common Stock (in shares)	(13)
Repurchase of Common Stock	$ (7)	(652)	0	(961)	(1,620)
Stock-Based Compensation (in shares)	16
Stock-Based Compensation	$ 8	689	0		697
Other Comprehensive Income (Loss)	0	0	(155)	0	(155)
Net Income	0	0	0	4,408	4,408
Contingent Consideration Classified as Equity	$ 0	750	0	0	750
Balance (in shares) at Jun. 29, 2024	9,144
Balance at Jun. 29, 2024	$ 4,572	$ 175,299	$ (1,104)	$ 83,521	$ 262,288

Note 1 - General

3 Months Ended

Jun. 29, 2024

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE 1 – GENERAL

	% of Total Net Sales
	June 29,			June 24,
	2024			2023
Point-in-Time		85.6	%		90.7	%
Over Time - Output Method		14.4	%		9.3	%
Total		100.0	%		100.0	%

	*First Quarter Ended*
	*June 29,*		*June 24,*
	*2024*		*2023*
Average Shares Outstanding – Basic		9,064		7,622
Effect of Dilutive Common Stock Equivalents		132		140
Average Shares Outstanding – Diluted		9,196		7,762
Anti-dilutive Common Stock Equivalents		35		57

	*Goodwill*								*Intangible Assets*
	*Distribution*		*Service*			*Total*			*Distribution*			*Service*			*Total*
Net Book Value as of March 30, 2024	$	38,216	$	67,369		$	105,585		$	6,993		$	12,994		$	19,987
Additions		21,746		10,876			32,622			5,360			2,680			8,040
Amortization		-		-			-			(665	)		(1,108	)		(1,773	)
Currency Translation Adjustment		-		(61	)		(61	)		-			-			-
Net Book Value as of June 29, 2024	$	59,962	$	78,184		$	138,146		$	11,688		$	14,566		$	26,254

Other Liabilities: A summary of other current and non-current liabilities is as follows (amounts in thousands):

	(Unaudited)		(Audited)
	*June 29,*		*March 30,*
	*2024*		*2024*
Current Liabilities:
Accrued Payroll and Employee Benefits	$	4,074	$	5,508
Accrued Incentives		986		4,182
Current Portion of Lease Liabilities		3,177		2,510
Accrued Acquisition Holdbacks		3,216		2,577
Accrued Sales Tax		727		813
Accrued Contingent Consideration		-		529
Other Current Liabilities		497		620
Accrued Compensation and Other Current Liabilities	$	12,677	$	16,739

Non-Current Liabilities:
Postretirement Benefit Obligation	$	1,130	$	1,134
Accrued Acquisition Holdbacks		1,647		1,647
Accrued Contingent Consideration		750		-
Other Non-Current Liabilities		130		122
Other Liabilities	$	3,657	$	2,903

Note 2 - Long-term Debt

3 Months Ended

Jun. 29, 2024

Notes to Financial Statements

Long-Term Debt [Text Block]

NOTE 2 – LONG-TERM DEBT

As of June 29, 2024, $80.0 million was available for borrowing under the revolving credit facility. As of June 29, 2024, there were no amounts outstanding under the revolving credit facility.

Note 3 - Stock-based Compensation

3 Months Ended

Jun. 29, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 3 – STOCK-BASED COMPENSATION

The following table summarizes the non-vested restricted stock units outstanding as of June 29, 2024 (in thousands, except per unit data):

		*Total*	*Grant Date*		*Estimated*
		*Number*	*Fair*		*Level of*
Date	*Measurement*	*of Units*	*Value*		*Achievement at*
Granted	*Period*	*Outstanding*	*Per Unit*		*June 29, 2024*
October 2018	October 2018 – September 2028	5	$	20.81	Time Vested
September 2021	September 2021 – September 2024	4	$	67.76	Time Vested
March 2022	March 2022 – March 2025	1	$	76.31	Time Vested
May 2022	May 2022 – March 2025	8	$	63.17	55% of target level
May 2022	May 2022 – March 2025	9	$	63.17	Time Vested
August 2022	August 2022 – August 2025	1	$	78.04	Time Vested
December 2022	December 2022 – December 2025	1	$	67.48	Time Vested
May 2023	May 2023 – March 2026	8	$	89.70	150% of target level
May 2023	May 2023 – March 2026	8	$	89.70	Time Vested
May 2023	May 2023 – May 2026	13	$	89.70	Time Vested
August 2023	August 2023 – August 2024	6	$	90.56	Time Vested
September 2023	September 2023 – September 2024	4	$	109.55	Time Vested
April 2024	April 2024 - April 2027	2	$	107.13	Time Vested
April 2024	April 2024 - April 2027	1	$	108.04	Time Vested
May 2024	May 2024 - May 2027	1	$	119.45	Time Vested
May 2024	May 2024 - May 2027	1	$	124.12	Time Vested
May 2024	May 2024 - March 2027	9	$	124.12	100% of target level
May 2024	May 2024 - March 2027	10	$	124.12	Time Vested

	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*

Risk-Free Interest Rate		4.74	%		3.43	%
Volatility Factor		41.41	%		37.16	%
Expected Term (in Years)		4.00			6.19
Annual Dividend Rate		0.00	%		0.00	%

During the first quarter of fiscal year 2025, the Company granted options for 4,000 shares of common stock in the aggregate to Company employees that vest over three years.

The expense related to all stock option awards was $0.4 million in the first three months of fiscal year 2025 and $0.3 million in the first three months of fiscal year 2024.

The following table summarizes the Company’s options as of and for the first quarter ended June 29, 2024 (in thousands, except price per option data and years):

				*Weighted*		*Weighted*
				*Average*		*Average*
	*Number*			*Exercise*		*Remaining*		*Aggregate*
	Of			*Price Per*		*Contractual*		*Intrinsic*
	*Options*			*Option*		*Term (in years)*		*Value*
Outstanding as of March 30, 2024		234		$	63.43
Granted		4		$	108.04
Exercised		(4	)	$	24.30
Forfeited		(12	)	$	52.64
Outstanding as of June 29, 2024		222		$	64.91		5	$	12,159
Exercisable as of June 29, 2024		63		$	36.21		5	$	4,750

Note 4 - Segment Information

3 Months Ended

Jun. 29, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 4 – SEGMENT INFORMATION

	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*
Revenue:
Service	$	43,778		$	39,853
Distribution		22,929			20,745
Total		66,707			60,598

Gross Profit:
Service		14,883			12,971
Distribution		7,772			5,739
Total		22,655			18,710

Operating Expenses:
Service ⁽¹⁾		10,793			9,779
Distribution ⁽¹⁾		6,763			4,291
Total		17,556			14,070

Operating Income:
Service		4,090			3,192
Distribution		1,009			1,448
Total		5,099			4,640

Unallocated Amounts:
Interest and Other (Income)/Expense, net		(129	)		878
Provision for Income Taxes		820			813
Total		691			1,691

Net Income	$	4,408		$	2,949

Geographic Data:
Revenues to Unaffiliated Customers ⁽²⁾
United States ⁽³⁾	$	60,741		$	54,257
Canada		4,472			4,247
Other International		1,494			2,094
Total	$	66,707		$	60,598

⁽¹⁾	Operating expense allocations between segments are based on actual amounts, a percentage of revenues, headcount, and management’s estimates.

⁽²⁾	Revenues are attributed to the countries based on the destination of a product shipment or the location where service is rendered.

⁽³⁾	United States includes Puerto Rico.

Note 5 - Business Acquisitions

3 Months Ended

Jun. 29, 2024

Notes to Financial Statements

Business Combination Disclosure [Text Block]

NOTE 5 – BUSINESS ACQUISITIONS

Goodwill		$32,659
Intangible Assets – Customer Base & Contracts			7,200
Intangible Assets – Trademarks and Tradenames			840
			40,699

Plus:	Cash		197
	Accounts Receivable		3,041
	Property and Equipment		6,122
	Other Current Assets		95
Less:	Current Liabilities		(253	)
Total Purchase Price		$	49,901

Goodwill		$	26,758
Intangible Assets – Customer Base & Contracts			7,900
			34,658
Plus:	Cash		161
	Accounts Receivable		925
	Inventory		1,796
	Other Current Assets		40
	Property and Equipment		4,965
Less:	Current Liabilities		(579	)
	Deferred Tax Liability		(3,242	)
Total Purchase Price		$	38,724

Goodwill		$	2,175
Intangible Assets – Customer Base & Contracts			1,062
Intangible Assets – Covenant Not to Compete			392
Intangible Assets – Sales Backlog			95
			3,724
Plus:	Accounts Receivable		666
Less:	Current Liabilities		(211	)
	Deferred Tax Liability		(395	)
Total Purchase Price		$	3,784

Goodwill		$	7,218
Intangible Assets – Customer Base & Contracts			2,303
Intangible Assets – Covenant Not to Compete			132
			9,653
Plus:	Accounts Receivable		502
	Property and Equipment		356
Less:	Current Liabilities		(124	)
	Deferred Tax Liability		(712	)
Total Purchase Price		$	9,675

	(Unaudited)
	*First Quarter Ended*
(in thousands except per share information)	*June 29, 2024*		*June 24, 2023*

Total Revenue	$	66,727	$	68,374
Net Income	$	4,420	$	3,790
Basic Earnings Per Share	$	0.49	$	0.50
Diluted Earnings Per Share	$	0.48	$	0.49

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 29, 2024
Insider Trading Arr Line Items
Material Terms of Trading Arrangement [Text Block]	PART II. OTHER INFORMATION
Non-Rule 10b5-1 Arrangement Adopted [Flag]	false
Rule 10b5-1 Arrangement Adopted [Flag]	false
Rule 10b5-1 Arrangement Terminated [Flag]	false
Non-Rule 10b5-1 Arrangement Terminated [Flag]	false

Significant Accounting Policies (Policies)

3 Months Ended

Jun. 29, 2024

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Use of Estimates, Policy [Policy Text Block]

Cash and Cash Equivalents, Policy [Policy Text Block]

Marketable Securities, Policy [Policy Text Block]

Revenue [Policy Text Block]

	% of Total Net Sales
	June 29,			June 24,
	2024			2023
Point-in-Time		85.6	%		90.7	%
Over Time - Output Method		14.4	%		9.3	%
Total		100.0	%		100.0	%

Fair Value of Financial Instruments, Policy [Policy Text Block]

Share-Based Payment Arrangement [Policy Text Block]

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Earnings Per Share, Policy [Policy Text Block]

	*First Quarter Ended*
	*June 29,*		*June 24,*
	*2024*		*2023*
Average Shares Outstanding – Basic		9,064		7,622
Effect of Dilutive Common Stock Equivalents		132		140
Average Shares Outstanding – Diluted		9,196		7,762
Anti-dilutive Common Stock Equivalents		35		57

Goodwill and Intangible Assets, Policy [Policy Text Block]

	*Goodwill*								*Intangible Assets*
	*Distribution*		*Service*			*Total*			*Distribution*			*Service*			*Total*
Net Book Value as of March 30, 2024	$	38,216	$	67,369		$	105,585		$	6,993		$	12,994		$	19,987
Additions		21,746		10,876			32,622			5,360			2,680			8,040
Amortization		-		-			-			(665	)		(1,108	)		(1,773	)
Currency Translation Adjustment		-		(61	)		(61	)		-			-			-
Net Book Value as of June 29, 2024	$	59,962	$	78,184		$	138,146		$	11,688		$	14,566		$	26,254

Other Liabilities Policy [Policy Text Block]

Other Liabilities: A summary of other current and non-current liabilities is as follows (amounts in thousands):

	(Unaudited)		(Audited)
	*June 29,*		*March 30,*
	*2024*		*2024*
Current Liabilities:
Accrued Payroll and Employee Benefits	$	4,074	$	5,508
Accrued Incentives		986		4,182
Current Portion of Lease Liabilities		3,177		2,510
Accrued Acquisition Holdbacks		3,216		2,577
Accrued Sales Tax		727		813
Accrued Contingent Consideration		-		529
Other Current Liabilities		497		620
Accrued Compensation and Other Current Liabilities	$	12,677	$	16,739

Non-Current Liabilities:
Postretirement Benefit Obligation	$	1,130	$	1,134
Accrued Acquisition Holdbacks		1,647		1,647
Accrued Contingent Consideration		750		-
Other Non-Current Liabilities		130		122
Other Liabilities	$	3,657	$	2,903

New Accounting Pronouncements, Policy [Policy Text Block]

Note 1 - General (Tables)

3 Months Ended

Jun. 29, 2024

Notes Tables

Disaggregation of Revenue [Table Text Block]

	% of Total Net Sales
	June 29,			June 24,
	2024			2023
Point-in-Time		85.6	%		90.7	%
Over Time - Output Method		14.4	%		9.3	%
Total		100.0	%		100.0	%

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	*First Quarter Ended*
	*June 29,*		*June 24,*
	*2024*		*2023*
Average Shares Outstanding – Basic		9,064		7,622
Effect of Dilutive Common Stock Equivalents		132		140
Average Shares Outstanding – Diluted		9,196		7,762
Anti-dilutive Common Stock Equivalents		35		57

Schedule of Intangible Assets and Goodwill [Table Text Block]

	*Goodwill*								*Intangible Assets*
	*Distribution*		*Service*			*Total*			*Distribution*			*Service*			*Total*
Net Book Value as of March 30, 2024	$	38,216	$	67,369		$	105,585		$	6,993		$	12,994		$	19,987
Additions		21,746		10,876			32,622			5,360			2,680			8,040
Amortization		-		-			-			(665	)		(1,108	)		(1,773	)
Currency Translation Adjustment		-		(61	)		(61	)		-			-			-
Net Book Value as of June 29, 2024	$	59,962	$	78,184		$	138,146		$	11,688		$	14,566		$	26,254

Schedule of Accrued Liabilities [Table Text Block]

	(Unaudited)		(Audited)
	*June 29,*		*March 30,*
	*2024*		*2024*
Current Liabilities:
Accrued Payroll and Employee Benefits	$	4,074	$	5,508
Accrued Incentives		986		4,182
Current Portion of Lease Liabilities		3,177		2,510
Accrued Acquisition Holdbacks		3,216		2,577
Accrued Sales Tax		727		813
Accrued Contingent Consideration		-		529
Other Current Liabilities		497		620
Accrued Compensation and Other Current Liabilities	$	12,677	$	16,739

Non-Current Liabilities:
Postretirement Benefit Obligation	$	1,130	$	1,134
Accrued Acquisition Holdbacks		1,647		1,647
Accrued Contingent Consideration		750		-
Other Non-Current Liabilities		130		122
Other Liabilities	$	3,657	$	2,903

Note 3 - Stock-based Compensation (Tables)

3 Months Ended

Jun. 29, 2024

Notes Tables

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

		*Total*	*Grant Date*		*Estimated*
		*Number*	*Fair*		*Level of*
Date	*Measurement*	*of Units*	*Value*		*Achievement at*
Granted	*Period*	*Outstanding*	*Per Unit*		*June 29, 2024*
October 2018	October 2018 – September 2028	5	$	20.81	Time Vested
September 2021	September 2021 – September 2024	4	$	67.76	Time Vested
March 2022	March 2022 – March 2025	1	$	76.31	Time Vested
May 2022	May 2022 – March 2025	8	$	63.17	55% of target level
May 2022	May 2022 – March 2025	9	$	63.17	Time Vested
August 2022	August 2022 – August 2025	1	$	78.04	Time Vested
December 2022	December 2022 – December 2025	1	$	67.48	Time Vested
May 2023	May 2023 – March 2026	8	$	89.70	150% of target level
May 2023	May 2023 – March 2026	8	$	89.70	Time Vested
May 2023	May 2023 – May 2026	13	$	89.70	Time Vested
August 2023	August 2023 – August 2024	6	$	90.56	Time Vested
September 2023	September 2023 – September 2024	4	$	109.55	Time Vested
April 2024	April 2024 - April 2027	2	$	107.13	Time Vested
April 2024	April 2024 - April 2027	1	$	108.04	Time Vested
May 2024	May 2024 - May 2027	1	$	119.45	Time Vested
May 2024	May 2024 - May 2027	1	$	124.12	Time Vested
May 2024	May 2024 - March 2027	9	$	124.12	100% of target level
May 2024	May 2024 - March 2027	10	$	124.12	Time Vested

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*

Risk-Free Interest Rate		4.74	%		3.43	%
Volatility Factor		41.41	%		37.16	%
Expected Term (in Years)		4.00			6.19
Annual Dividend Rate		0.00	%		0.00	%

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

				*Weighted*		*Weighted*
				*Average*		*Average*
	*Number*			*Exercise*		*Remaining*		*Aggregate*
	Of			*Price Per*		*Contractual*		*Intrinsic*
	*Options*			*Option*		*Term (in years)*		*Value*
Outstanding as of March 30, 2024		234		$	63.43
Granted		4		$	108.04
Exercised		(4	)	$	24.30
Forfeited		(12	)	$	52.64
Outstanding as of June 29, 2024		222		$	64.91		5	$	12,159
Exercisable as of June 29, 2024		63		$	36.21		5	$	4,750

Note 4 - Segment Information (Tables)

3 Months Ended

Jun. 29, 2024

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	*First Quarter Ended*
	*June 29,*			*June 24,*
	*2024*			*2023*
Revenue:
Service	$	43,778		$	39,853
Distribution		22,929			20,745
Total		66,707			60,598

Gross Profit:
Service		14,883			12,971
Distribution		7,772			5,739
Total		22,655			18,710

Operating Expenses:
Service ⁽¹⁾		10,793			9,779
Distribution ⁽¹⁾		6,763			4,291
Total		17,556			14,070

Operating Income:
Service		4,090			3,192
Distribution		1,009			1,448
Total		5,099			4,640

Unallocated Amounts:
Interest and Other (Income)/Expense, net		(129	)		878
Provision for Income Taxes		820			813
Total		691			1,691

Net Income	$	4,408		$	2,949

Geographic Data:
Revenues to Unaffiliated Customers ⁽²⁾
United States ⁽³⁾	$	60,741		$	54,257
Canada		4,472			4,247
Other International		1,494			2,094
Total	$	66,707		$	60,598

Note 5 - Business Acquisitions (Tables)

3 Months Ended

Jun. 29, 2024

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Goodwill		$32,659
Intangible Assets – Customer Base & Contracts			7,200
Intangible Assets – Trademarks and Tradenames			840
			40,699

Plus:	Cash		197
	Accounts Receivable		3,041
	Property and Equipment		6,122
	Other Current Assets		95
Less:	Current Liabilities		(253	)
Total Purchase Price		$	49,901

Goodwill		$	26,758
Intangible Assets – Customer Base & Contracts			7,900
			34,658
Plus:	Cash		161
	Accounts Receivable		925
	Inventory		1,796
	Other Current Assets		40
	Property and Equipment		4,965
Less:	Current Liabilities		(579	)
	Deferred Tax Liability		(3,242	)
Total Purchase Price		$	38,724

Goodwill		$	2,175
Intangible Assets – Customer Base & Contracts			1,062
Intangible Assets – Covenant Not to Compete			392
Intangible Assets – Sales Backlog			95
			3,724
Plus:	Accounts Receivable		666
Less:	Current Liabilities		(211	)
	Deferred Tax Liability		(395	)
Total Purchase Price		$	3,784

Goodwill		$	7,218
Intangible Assets – Customer Base & Contracts			2,303
Intangible Assets – Covenant Not to Compete			132
			9,653
Plus:	Accounts Receivable		502
	Property and Equipment		356
Less:	Current Liabilities		(124	)
	Deferred Tax Liability		(712	)
Total Purchase Price		$	9,675

Business Acquisition, Pro Forma Information [Table Text Block]

	(Unaudited)
	*First Quarter Ended*
(in thousands except per share information)	*June 29, 2024*		*June 24, 2023*

Total Revenue	$	66,727	$	68,374
Net Income	$	4,420	$	3,790
Basic Earnings Per Share	$	0.49	$	0.50
Diluted Earnings Per Share	$	0.48	$	0.49

Note 1 - General (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023	Mar. 30, 2024	Mar. 30, 2023
Investments	$ 0.1			$ 0.1
Share-Based Payment Arrangement, Expense	0.7	$ 0.9
Realized Gain (Loss), Foreign Currency Transaction, before Tax	0.1	0.1
Unrealized Gain (Loss), Foreign Currency Transaction, before Tax	$ 0.1	$ 0.1
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.5		$ 0.5
Dilutive Securities, Effect Per Share on Earnings (in dollars per share)	$ 0.01	$ 0.01
Foreign Exchange Contract [Member]
Derivative Asset, Notional Amount	$ 1.8

Note 1 - General - Summary of Net Sales by Revenue Recognition Method as a Percentage of Total Sales (Details)	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Revenue, percentage	100.00%	100.00%
Transferred at Point in Time [Member]
Revenue, percentage	85.60%	90.70%
Transferred over Time [Member]
Revenue, percentage	14.40%	9.30%

Note 1 - General - Computation of Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Average Shares Outstanding – Basic (in shares)	9,064	7,622
Effect of Dilutive Common Stock Equivalents (in shares)	132	140
Average Shares Outstanding – Diluted (in shares)	9,196	7,762
Anti-dilutive Common Stock Equivalents (in shares)	35	57

Note 1 - General - Summary of Changes in Goodwill and Intangible Assets (Details) $ in Thousands	3 Months Ended
	Jun. 29, 2024 USD ($)
Net Book Value, goodwill	$ 105,585
Net Book Value, intangible assets	19,987
Additions, goodwill	32,622
Additions, intangible assets	8,040
Amortization, goodwill	0
Amoritization, intangible assets	(1,773)
Currency Translation Adjustment, goodwill	(61)
Currency Translation Adjustment, intangible assets	0
Net Book Value, goodwill	138,146
Net Book Value, intangible assets	26,254
Distribution Segment [Member]
Net Book Value, goodwill	38,216
Net Book Value, intangible assets	6,993
Additions, goodwill	21,746
Additions, intangible assets	5,360
Amortization, goodwill	0
Amoritization, intangible assets	(665)
Currency Translation Adjustment, goodwill	0
Currency Translation Adjustment, intangible assets	0
Net Book Value, goodwill	59,962
Net Book Value, intangible assets	11,688
Service Segment [Member]
Net Book Value, goodwill	67,369
Net Book Value, intangible assets	12,994
Additions, goodwill	10,876
Additions, intangible assets	2,680
Amortization, goodwill	0
Amoritization, intangible assets	(1,108)
Currency Translation Adjustment, goodwill	(61)
Currency Translation Adjustment, intangible assets	0
Net Book Value, goodwill	78,184
Net Book Value, intangible assets	$ 14,566

Note 1 - General - Summary of Liabilities Current and Non-current (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Mar. 30, 2024
Accrued Payroll and Employee Benefits	$ 4,074	$ 5,508
Accrued Incentives	986	4,182
Current Portion of Lease Liabilities	3,177	2,510
Accrued Acquisition Holdbacks	3,216	2,577
Accrued Sales Tax	727	813
Accrued Contingent Consideration	0	529
Other Current Liabilities	497	620
Accrued Compensation and Other Current Liabilities	12,677	16,739
Postretirement Benefit Obligation	1,130	1,134
Accrued Acquisition Holdbacks	1,647	1,647
Accrued Contingent Consideration	750	0
Other Non-Current Liabilities	130	122
Other Liabilities	$ 3,657	$ 2,903

Note 2 - Long-term Debt (Details Textual) $ in Thousands	3 Months Ended	9 Months Ended
Note 2 - Long-term Debt (Details Textual) $ in Thousands	Jun. 29, 2024 USD ($)	Mar. 30, 2024 USD ($)	Jul. 07, 2021 USD ($)
Long-Term Debt, Current Maturities	$ 2,362	$ 2,339
The 2018 Term Loan [Member]
Debt Instrument, Face Amount			$ 15,000
Long-Term Debt	3,600
Long-Term Debt, Current Maturities	2,400
Debt Instrument, Periodic Payment, Total	$ 200
Debt Instrument, Interest Rate, Stated Percentage	3.90%
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity			80,000
Debt Instrument, Covenant, Restriction to Repurchase Shares and Pay Dividends, Aggregate	$ 25,000		10,000
Line of Credit Facility, Current Borrowing Capacity	80,000
Long-Term Line of Credit	$ 0
LIBOR Floor	0.25%
Debt Instrument, Covenant, Maximum Fixed Charge Ratio	1.15
Debt Instrument, Covenant, Maximum Total Leverage Ratio	3
Total Leverage Ratio	0.08	0.1
Revolving Credit Facility [Member] \| Maximum [Member]
Debt Instrument, Permitted Acquisition, Aggregate Purchase Price	$ 50,000
Debt Instrument, Permitted Acquisition, Additional Aggregate Purchase Price	$ 40,000
Debt Instrument, Interest Rate, Effective Percentage	7.10%
Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 10,000

Note 3 - Stock-based Compensation (Details Textual) - USD ($) Pure in Thousands, $ in Millions	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Share-Based Payment Arrangement, Expense, Tax Benefit	$ 0.6	$ 0.1
Share-Based Payment Arrangement, Expense	$ 0.7	0.9
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	4,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 0.4	0.2
Proceeds from Stock Options Exercised	$ 0.1	$ 0.1
Director [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)		5 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)		10,000
Performance-based Restricted Stock Units [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	3 years
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 5.8
Restricted Stock Units (RSUs) [Member]
Share-Based Payment Arrangement, Expense	0.3	$ 0.6
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 4.8
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	5 years
Share-Based Payment Arrangement, Expense	$ 0.4	$ 0.3
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 2.3
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	3 years
Share-Based Payment Arrangement, Option [Member] \| Share-Based Payment Arrangement, Employee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	4,000	6,000
Share-Based Payment Arrangement, Option [Member] \| Share-Based Payment Arrangement, Employee [Member] \| Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	3 years	3 years
Share-Based Payment Arrangement, Option [Member] \| Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)	5 years
Share-Based Payment Arrangement, Option [Member] \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)	10 years
The 2021 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)	600,000

Note 3 - Stock-based Compensation - Summary of Non-vested Restricted Stock Units (Details) - Performance-based Restricted Stock Units [Member] shares in Thousands	Jun. 29, 2024 $ / shares shares
October 2018 [Member]
Total number of units outstanding (in shares) \| shares	5
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 20.81
September 2021 [Member]
Total number of units outstanding (in shares) \| shares	4
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 67.76
March 2022 [Member]
Total number of units outstanding (in shares) \| shares	1
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 76.31
May 2022, First Issuance [Member]
Total number of units outstanding (in shares) \| shares	8
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 63.17
Estimated level of achievement	55.00%
May 2022, Second Issuance [Member]
Total number of units outstanding (in shares) \| shares	9
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 63.17
August 2022 Issuance [Member]
Total number of units outstanding (in shares) \| shares	1
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 78.04
December 2022 First Issuance [Member]
Total number of units outstanding (in shares) \| shares	1
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 67.48
May 2023 First Issuance [Member]
Total number of units outstanding (in shares) \| shares	8
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 89.7
Estimated level of achievement	150.00%
May 2023 Second Issuance [Member]
Total number of units outstanding (in shares) \| shares	8
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 89.7
May 2023 Third Issuance [Member]
Total number of units outstanding (in shares) \| shares	13
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 89.7
August 2023 [Member]
Total number of units outstanding (in shares) \| shares	6
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 90.56
September 2023 [Member]
Total number of units outstanding (in shares) \| shares	4
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 109.55
April 2024 First Issuance [Member]
Total number of units outstanding (in shares) \| shares	2
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 107.13
April 2024 Second Issuance [Member]
Total number of units outstanding (in shares) \| shares	1
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 108.04
May 2024 First Issuance [Member]
Total number of units outstanding (in shares) \| shares	1
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 119.45
May 2024 Second Issuance [Member]
Total number of units outstanding (in shares) \| shares	1
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 124.12
May 2024 Third Issuance [Member]
Total number of units outstanding (in shares) \| shares	9
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 124.12
Estimated level of achievement	100.00%
May 2024 Fourth Issuance [Member]
Total number of units outstanding (in shares) \| shares	10
Grant date fair value per unit (in dollars per share) \| $ / shares	$ 124.12

Note 3 - Stock-based Compensation - Weighted Average Assumptions (Details)	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Annual Dividend Rate	0.00%
Share-Based Payment Arrangement, Option [Member]
Risk-Free Interest Rate	4.74%	3.43%
Volatility Factor	41.41%	37.16%
Expected Term (in Years) (Year)	4 years	6 years 2 months 8 days
Annual Dividend Rate	0.00%	0.00%

Note 3 - Stock-based Compensation - Summary of Options (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 29, 2024 USD ($) $ / shares shares
Outstanding, number of options (in shares) \| shares	234
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 63.43
Granted, number of options (in shares) \| shares	4
Granted, weighted average exercise price (in dollars per share) \| $ / shares	$ 108.04
Exercised, number of options (in shares) \| shares	(4)
Exercised, weighted average exercise price (in dollars per share) \| $ / shares	$ 24.3
Forfeited, number of options (in shares) \| shares	(12)
Forfeited, weighted average exercise price (in dollars per share) \| $ / shares	$ 52.64
Outstanding, number of options (in shares) \| shares	222
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 64.91
Outstanding, weighted average remaining contractual term (Year)	5 years
Oustanding, aggregate intrinsic value \| $	$ 12,159
Exercisable, number of options (in shares) \| shares	63
Exercisable, weighted average exercise price (in dollars per share) \| $ / shares	$ 36.21
Exercisable, weighted average remaining contractual term (Year)	5 years
Exercisable, aggregate intrinsic value \| $	$ 4,750

Note 4 - Segment Information (Details Textual)	3 Months Ended
Note 4 - Segment Information (Details Textual)	Jun. 29, 2024
Number of Reportable Segments	2

Note 4 - Segment Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($)
$ in Thousands

3 Months Ended

Jun. 29, 2024

Jun. 24, 2023

Revenue

^[1]

$ 66,707

$ 60,598

Gross Profit

22,655

18,710

Operating Expenses

17,556

14,070

Operating Income

5,099

4,640

Interest and Other (Income)/Expense, net

(129)

878

Provision for Income Taxes

820

813

Total

691

1,691

Net Income

4,408

2,949

UNITED STATES

Revenue

^[1],[2]

60,741

54,257

CANADA

Revenue

^[1]

4,472

4,247

Other International [Member]

Revenue

^[1]

1,494

2,094

Service Segment [Member] | Operating Segments [Member]

Revenue

43,778

39,853

Gross Profit

14,883

12,971

Operating Expenses

^[3]

10,793

9,779

Operating Income

4,090

3,192

Distribution Segment [Member] | Operating Segments [Member]

Revenue

22,929

20,745

Gross Profit

7,772

5,739

Operating Expenses

^[3]

6,763

4,291

Operating Income

$ 1,009

$ 1,448

[1]	Revenues are attributed to the countries based on the destination of a product shipment or the location where service is rendered.
[2]	United States includes Puerto Rico.
[3]	Operating expense allocations between segments are based on actual amounts, a percentage of revenues, headcount, and management’s estimates.

Note 5 - Business Acquisitions (Details Textual)
$ in Thousands

3 Months Ended

Apr. 15, 2024

USD ($)

Dec. 23, 2023

USD ($)

Aug. 08, 2023

USD ($)

Jul. 12, 2023

USD ($)

Mar. 27, 2023

USD ($)

Jun. 29, 2024

USD ($)

Jun. 24, 2023

USD ($)

Mar. 30, 2024

USD ($)

Revenues

^[1]

$ 66,707

$ 60,598

Operating Income (Loss)

5,099

4,640

Business Combination, Contingent Consideration, Liability, Current

3,200

Business Combination, Contingent Consideration, Liability, Noncurrent

750

$ 0

Unpaid Amounts for Other Holdbacks

1,600

Payment for Contingent Consideration Liability, Financing Activities

Payments for Other Holdbacks

300

Business Combination, Acquisition Related Costs

400

200

Becnel Rental Tools, LLC [Member]

Revenues

2,700

Operating Income (Loss)

600

Axiom [Member]

Revenues

2,600

Operating Income (Loss)

400

SteriQual, Inc. [Member]

Revenues

500

Operating Income (Loss)

100

TIC-MS, Inc. [Member]

Revenues

900

Operating Income (Loss)

400

Becnel Rental Tools, LLC [Member]

Business Combination, Consideration Transferred

$ 49,900

Payments to Acquire Businesses, Gross

17,500

Business Combination, Consideration Transferred, Equity Interests Issued and Issuable

32,300

Business Combination, Payment Withheld for Potential Post-closing Adjustments

2,500

Business Combination, Consideration Held Back

500

Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High

$ 2,000

Business Combination, Contingent Consideration, Liability

1,500

Business Combination, Contingent Consideration, Liability, Payable in Cash, Percentage

50.00%

Business Combination, Contingent Consideration, Liability, Payable in Shares, Percentage

50.00%

Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low

$ 0

Becnel Rental Tools, LLC [Member] | Revenue Target Achievement [Member]

Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | shares

9,283

Becnel Rental Tools, LLC [Member] | Measurement Input, Discount Rate [Member]

Business Combination, Contingent Consideration, Liability, Measurement Input

0.11

Becnel Rental Tools, LLC [Member] | Measurement Input, Risk Free Interest Rate [Member]

Business Combination, Contingent Consideration, Liability, Measurement Input

0.05

Becnel Rental Tools, LLC [Member] | Measurement Input, Price Volatility [Member]

Business Combination, Contingent Consideration, Liability, Measurement Input

0.30

Becnel Rental Tools, LLC [Member] | Maximum [Member]

Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life (Year)

11 years

Axiom [Member]

Business Combination, Consideration Transferred

$ 38,700

Payments to Acquire Businesses, Gross

10,000

Business Combination, Consideration Transferred, Equity Interests Issued and Issuable

28,600

Business Combination, Payment Withheld for Potential Post-closing Adjustments

$ 3,900

SteriQual, Inc. [Member]

Business Combination, Consideration Transferred

$ 3,800

$ 4,300

Business Combination, Consideration Held Back

900

Business Combination, Consideration Subject to Reduction

$ 500

TIC-MS, Inc. [Member]

Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life (Year)

15 years

Business Combination, Consideration Transferred

$ 9,700

Payments to Acquire Businesses, Gross

2,900

Business Combination, Consideration Transferred, Equity Interests Issued and Issuable

$ 6,900

Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | shares

77,387

Business Combination, Consideration Subject to Reduction

$ 500

Escrow Deposit

$ 500

Business Combination, Potential Purchase Price Adjustment for Failure to Retain Key Customer Relationships

$ 500

NEXA [Member]

Payment for Contingent Consideration Liability, Financing Activities

$ 500

Stock Issued During Period, Shares, Acquisitions (in shares) | shares

4,320

[1]	Revenues are attributed to the countries based on the destination of a product shipment or the location where service is rendered.

Note 5 - Business Acquisitions - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Apr. 15, 2024	Mar. 30, 2024	Aug. 08, 2023	Jul. 12, 2023	Mar. 27, 2023
Goodwill	$ 138,146		$ 105,585
Becnel Rental Tools, LLC [Member]
Goodwill		$ 32,659
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, Intangibles and Deferred Taxes		40,699
Cash		197
Accounts Receivable		3,041
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory		6,122
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other		95
Current Liabilities		(253)
Total Purchase Price		49,901
Becnel Rental Tools, LLC [Member] \| Customer-Related Intangible Assets [Member]
Intangible Assets		7,200
Becnel Rental Tools, LLC [Member] \| Trademarks and Trade Names [Member]
Intangible Assets		$ 840
Axiom [Member]
Goodwill				$ 26,758
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, Intangibles and Deferred Taxes				34,658
Cash				161
Accounts Receivable				925
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory				1,796
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other				40
Current Liabilities				(579)
Total Purchase Price				38,724
Property and Equipment				4,965
Deferred Tax Liability				(3,242)
Axiom [Member] \| Customer-Related Intangible Assets [Member]
Intangible Assets				$ 7,900
SteriQual, Inc. [Member]
Goodwill					$ 2,175
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, Intangibles and Deferred Taxes					3,724
Accounts Receivable					666
Current Liabilities					(211)
Total Purchase Price					3,784
Deferred Tax Liability					(395)
SteriQual, Inc. [Member] \| Customer-Related Intangible Assets [Member]
Intangible Assets					1,062
SteriQual, Inc. [Member] \| Noncompete Agreements [Member]
Intangible Assets					392
SteriQual, Inc. [Member] \| Sales Backlog [Member]
Intangible Assets					$ 95
TIC-MS, Inc. [Member]
Goodwill						$ 7,218
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, Intangibles and Deferred Taxes						9,653
Accounts Receivable						502
Current Liabilities						(124)
Total Purchase Price						9,675
Property and Equipment						356
Deferred Tax Liability						(712)
TIC-MS, Inc. [Member] \| Customer-Related Intangible Assets [Member]
Intangible Assets						2,303
TIC-MS, Inc. [Member] \| Noncompete Agreements [Member]
Intangible Assets						$ 132

Note 5 - Business Acquisitions - Pro Forma Results (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Jun. 29, 2024	Jun. 24, 2023
Total Revenue	$ 66,727	$ 68,374
Net Income	$ 4,420	$ 3,790
Basic Earnings Per Share (in dollars per share)	$ 0.49	$ 0.5
Diluted Earnings Per Share (in dollars per share)	$ 0.48	$ 0.49

Grafico Azioni Transcat (NASDAQ:TRNS)
Storico
Da Gen 2025 a Feb 2025

Grafico Azioni Transcat (NASDAQ:TRNS)
Storico
Da Feb 2024 a Feb 2025

TRNS Transcat Inc

Notizie Transcat Inc - TRNS

La tua Cronologia

Più Attivi

Toplist

TRNS Transcat Inc

Notizie Transcat Inc - TRNS

La tua Cronologia

Rimuovi gli annunci